Experts are predicting ‘headwinds’ for the maritime industry in 2024. Traditional indicators support the claim; consumer confidence is faltering and the cargo-carrying capacity of the maritime fleet has surpassed demand – a trend that is expected to continue in the foreseeable future. Will the ‘rough seas’ have the industry compromise on its obligations to fight climate change?, asks Davide Ippolito, Director, Solution Management at Hempel.

In November 2023, the results of the most recent CNBC Supply Chain Survey made the headlines; “The global freight recession will continue in 2024”. The Russia-Ukraine conflict persists, tensions in the Middle East, including the Red Sea, remain unresolved and the maritime industry is witnessing a surge in global commodity prices.

The implications are far-reaching; consumer confidence is below 100 in OECD nations, and the outlook on the producer side of economic sentiment remains pessimistic. The PMI indices in key maritime hubs such as the US, the EU, and China persistently hover below the critical threshold of 50, signalling challenges ahead for the industry.

These challenges come at a time when the industry has been leaning into the decarbonisation agenda like never before. It has escaped very few followers of the industry that container giants like Maersk aims to achieve net-zero greenhouse gas emissions by 2040, MSC have the ambition to achieve carbon neutrality across the entire Cargo Division by 2050 and CMA CGM has set out to reach its Net Zero Carbon goal by 2050.

Many other actors in the maritime industry have similar pledges, guided by the IMO’s revised GHG Strategy, which includes an enhanced ambition to reach net-zero GHG emissions from international shipping by 2050. But, if earnings are under pressure – will the environment be the first to suffer?

Not if you ask Davide Ippolito, Director of Solution Management at Hempel: “The maritime industry has too much to gain from pursuing the green agenda and too much to lose from tapping out of the energy transition now,” he explains, going on to list three key reasons why he is so confident;

1. The most obvious one first: the quickest way to reduce fuel costs is still through ‘energy efficiency’ – which also brings reductions in carbon emissions. There are multiple ways shipowners and charterers can improve hull performance and thereby their energy efficiency – today.
2. Reporting and legislation with an increased focus on value chain carbon footprint is beginning to kick-in – especially in the EU. As customers and end-consumers are also requiring much higher degrees of transparency, carbon reductions will remain a focus area.
3. The Green Corridors initiative is expanding and maturing, providing another incentive to remain committed to the sustainability journey. Shipowners and charterers will want to be a part of the Green Corridors initiative that is set to offer both targeted regulatory measures and also financial incentives.

As the maritime industry braces for the challenges forecasted in 2024, the question of whether profitability will take priority over sustainability will creep in to public discussion. But despite geopolitical tensions and a potential global freight recession, commitment to decarbonization remains steady, with leaders like Maersk and CMA CGM pledging net-zero emissions by 2040 and 2050, respectively. “In short, the industry simply has too much to lose, also from a profit standpoint, by sidelining sustainability in the face of economic headwinds,” Davide continues.

To be sure, the industry's response to the challenges ahead will require a delicate balance between profitability and sustainability. While economic viability remains crucial, it is increasingly evident that the pursuit of long-term environmental goals is integral to securing a thriving and resilient maritime future. “In 2024, the answer is not a trade-off between profitability and sustainability, but a strategic integration of both for a stronger, greener industry,” concludes Davide.