Shipping firms fear prolonged trade war

Published October 29, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Norwegian shipping companies, which employ roughly 20,000 Filipino seafarers and one of the best employers globally, expect stable recruitment of Filipino crew as the global maritime industry is on a downturn and further threatened by the negative impact in case the US-China trade war is prolonged.

Harald Solberg, CEO of the Norwegian Shipowners’ Association, said during a press conference held at the Norwegian Training Center in Manila that employment of Filipino seamen would remain stable.

NSA groups 130 Norwegian shipping companies with 700 offices globally. Most of them are represented in Manila and employ roughly 20,000 Filipino seafarers making them one of the employers of Filipino seamen.

“Recruitment, I am more confident it is stable going forward,” said Solberg when asked if Norwegian shipping firms would increase hiring in the Philippines. He also cited the quality Filipino workforce.

Solberg said that the trade war is not going to impact in the deployment of Filipino seamen to Norwegian ships in the short term, but if it is prolonged an adverse toll on the shipping sector would be felt in five years.

“We are really concern about the development of a more protectionist world,” he said noting that the “trade dispute could influence the world economy so it is a worrying signal.”

Solberg said that various shipping chambers and associations worldwide have discussions on this issue.

“No, it will not affect our recruitment, not in the short term,” he said.

He, however, explained that if the development affects the globalized world under the World Trade Organization and the established global chain and reverse the process, the trade war “can do harm to the shipping sector in the long term.”

“If the trade war goes on and tightening of tariffs in next five years, then we should be very worried,” he said.

Trade war will bring uncertainty and cause increases in freight rates.
“We are concern about long term. It can obviously lead to lower demand of ships,” Solberg said. It can also increase cost to shipbuilders at a time when the shipbuilding industry is already struggling.

He also noted of “too many ships in the market” and the need to reduce that vokume when trade goes down.

“We have to prepare for some challenging years,” he added.

According to Solberg, the shipping sector is also facing some challenges as its business is largely governed by new regulations and compliance with the agreed Sustainable Development Goals (SDGs). As an industry, shipping firms are obliged to undertake measures to attain zero emission goals to help fight climate change. The International Maritime Organization requires shipping firms to reduce harmful emissions in their ships by 50 percent by 2050.

This means, companies have to work with governments to come up with new technologies and solutions to control pollution in the oceans by using renewable energies like solar, biogas and batteries.

But Solberg downplayed fears that new technologies in shipping such as automation and digitalization would displace sea-based workers.

He said there will be more autonomous ship operations in the future but “There will be jobs in the future with new technologies.”

He said that in 2020, Norway will have the first autonomous container line but there would still be crew onboard and after two years of fine-tuning, crewmen will sit onshore to supervise the boat.

“So,even autonomous ships need competence from onshore supervisors,” he said.
There will be new opportunities in coming up with new technologies and solutions like optimized port operations, new regulations, new competence, new business models and new areas of cooperation.

“The value chain in shipping is big so there are opportunities for the Philippines and other countries to develop new digital solutions,” Solberg added.

“The future of shipping is all about people,” he said as he stressed opportunities to create new technologies that can be deployed on a commercial scale, new demand for soft skills and further research on human impact.

“This creates big opportunities for training centers,” he added. A Norwegian Training Center for seafarers has long been established in the country.