The maritime industry is facing major challenges due to the ongoing COVID-19 pandemic. The downward shift in production and manufacturing activities is having adverse effects on the supply chain that is translating into the global shipping industry.
The COVID-19 outbreak negatively impacted the maritime sector and slowed activity due to a sharp drop in demand. The cessation of production in the industrial sector and the decline in oil demand had a major impact on the dry bulk and tanker shipping segments. Oil tanker revenues increased in the three months from March 2020 to May 2020, before declining sharply thereafter. However, predictions of stabilizing global oil demand point to a better 2021 for this segment. The discontinuation of all cruises was another blow to the sector, with cruise traffic estimated to fall by 6-12 million passengers. Offshore vessels have also been shut down globally; and still owners are finding it difficult to bring them back into service or recycle them due to low demand.
Nevertheless, there is hope on the horizon again, especially after the relaxation of the lockdown measures. Increasing container volumes in the passage of the Far East and North America after mid-2020 gave a boost to the container shipping segment. Freight rates also reached $5,000 per TEU, the highest in the past 18 months. The offshore wind sector was largely protected from the effects of the COVID-19 crisis, mainly due to longer project timelines.
Renewable energy technologies, such as offshore wind, can achieve more than 90% of the emissions reductions needed while providing jobs and economic benefits. About one-third of all new renewable energy capacity added in 2019 came from wind power. Offshore wind, as a clean, scalable and affordable technology, will be critical in supporting decarbonization. With evolving technologies, policy shifts, reduced market and regulatory barriers, intensified commitment to renewable energy, growth in investment, a strengthening economic case and a strong pipeline of profitable projects, offshore wind will continue to help green recovery; becoming a cornerstone of the global energy transformation movement.
This newsletter focuses on the various shipping sectors and highlights the Offshore Wind sector, a thriving sector for a green future.