After a contraction in 2022 the maritime trade showed a 2.4% increase in 2023 according to the United Nations Conference on Trade and Development. We have seen better management methods in the maritime sector, like embracing green technologies, using digitalization and greater overall international co-operation. This last area has relevance in places like the Suez and Panama Canals. However, geopolitical tensions, conflicts and climate change are all creating issues which need sensitive management when managing shipping through these routes.
Diversions away from The Suez Canal were due to attacks in the Red Sea, and the Panama Canal was affected by drought and low water levels. Â The need for flexibility in the shipping industry and therefore maritime careers has been affected by two global issues recently. One was the war in Ukraine which created its own set of disruptions and the Covid 19 Pandemic which had global implications, where shipping had to find its own level playing field, facing up to these new issues.
The ship-building market in 2023 was dominated by three countries. 95% of post pandemic deliveries were undertaken by China, Japan and The Republic of Korea. In this year the fleet growth was moderate with the orderbook remaining limited but greener. This ability of ships to be dual fuel or capable of using multiple types of fuel, means the greening of the fleet is underway.
During 2024 around 50% of vessels on order were designed to use alternative fuels and around 14% were classified as alternative fuel ready. Liquified Natural Gas accounted for 36.1% of those ordered in this year. Those which will use Methanol Capable fuel, which container ships are inclined to make use of, accounted for 9.3% of orders. There are also orders for ammonia- capable ships while wind assisted propulsion is also a modern consideration.
195 ports are offering LNG bunkering currently, while a further 77 are developing this option and 28 are providing bunkering for at least one other alternative fuel. Also, some 205 ports are making available shore side power, with around 2500 ships being fitted with shore power connections.
The global fleet is aging, with many ships soon to be reaching their end of service. Renewal, on many levels, is a relevant theme in the industry. Smaller vessels, which have been in use for longer are contributing to the higher average age. More than half of the fleet is 15 years old, and the average age of ships went up across all types of vessels apart from container ships, which saw an influx in 2023.
This renewal of the fleet brings in to light a need to manage the scrapping of old vessels. The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships is set to be in force by 26th June 2025. The shipping industry will have to endure increased costs in demolition yards. Happily, all facilities in India, which handled 7.1% of scrapping in 2023 are compliant, while Bangladesh, which dealt with 46% of tonnage sold for demolition, in the same time period, are currently one third ready for the regulations which are to be put in place.
