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The outlook of the maritime industry in 2022 21 Dec 2021

Maritime tourism provided one of the earliest disruptive spectacles of the outbreak of SARS-CoV-2, otherwise known as COVID-19. In early 2020, the Diamond Princess cruise ship had to anchor at the Yokohama port in Japan for weeks. About 700 cases of infections and seven deaths were reported aboard the luxury ship, providing the earliest indication that COVID-19 spreads faster in closed spaces. What followed was a widespread disruption of global supply chains, from which the world has yet to fully recover, although maritime ultimately proved to be the most resilient to the pandemic among the international transportation links.

As the curtain closes on year 2021, the outlook of the maritime sector for 2022 is set to be shaped by developments other than the pandemic. This is in spite of the scare of a new wave of infections in Europe and the report of a new variant that is likely to be more transmissible. Many countries have tweaked their policies to suggest they accept that the coronavirus is unlikely to disappear very soon and so are ready to live with it.

Thus, other issues have moved to the front burner of the maritime sector. Prominent among these is the climate crisis. COP26, which successfully held in Glasgow, Scotland, last month, showed that the world is united in forestalling apocalyptic rise in global temperature.

Maritime is a fitting area for international cooperative actions against climate change and for environmental sustainability. Like finance, the maritime sector is being shaped by the concerted efforts of international institutions, governments, industry people, and other stakeholders. The International Maritime Organization (IMO) and the Commonwealth – a group of 54 independent nations – are set to galvanise maritime stakeholders in 2022 and drive the agenda for the industry.

The IMO has outlined the countries/states that have indicated their candidature for the IMO Council 2022-2023. The election is set to hold during the 32nd Session of the IMO Assembly, scheduled for 6 – 15 December 2021, at a venue yet to be announced as of the time of writing.

Nigeria indicated its interest under Category C, which was created for states that are not present under Categories A or B, but have special interests in maritime transport or navigation, and whose election to the council will amongst other things, ensure the representation of all major geographical areas of the world. The Category A comprises 10 states with the largest interest in providing international shipping services, namely China, Greece, Italy, Japan, Norway, Panama, Republic of Korea, Russian Federation, United Kingdom, United States. Category B is comprised of 10 states with the largest interest in international seaborne trade: Argentina, Australia, Brazil, Canada, France, Germany, India, the Netherlands, Spain and the United Arab Emirates.

The IMO Council is the executive organ of the IMO and is responsible, under the Assembly, for supervising the work of the organization. The council is made up of 40 member states, elected by the Assembly for a term of two years. Nigeria’s success in the election will help in advancing the country’s interest in international maritime.  

Another momentous event next year is the enforcement of the  IMDG (International Maritime Dangerous Goods) Code, which was developed as an international code for the maritime transportation of dangerous goods in packaged form. The Code will come into force on 1 June 2022. It was designed to enhance and harmonize the safe carriage of dangerous goods and to prevent pollution to the environment.

The IMDG Code, 2020 Edition, came into force on 1 January 2020, for two years. It had applied voluntarily since 2019. The validity of this Code was extended till 31 May 2022, in order to pave the way for effective enforcement of the successor Code.

However, as impactful as the new Code is expected to be, the theme adopted for the maritime industry in 2022 – “New Technologies for Greener Shipping” – will mostly shape the outlook. The IMO Council endorsed the theme following a proposal by the incumbent IMO Secretary General, Kitack Lim.

According to Lim, “the theme would provide an opportunity to focus on the importance of a sustainable maritime sector and the need to build back better and greener in a post pandemic world.” He added that in order to achieve these objectives, partnerships are key, as they allow parties involved to share and distribute information on best practices and to access resources and general know-how in support of the transition of the maritime sector into a greener and more sustainable future.

“This theme will allow for coordinated outreach and communications campaign by all stakeholders to highlight IMO initiatives to make shipping greener”, Lim said.

The range of activities to promote inclusive innovation and uptake of new technologies for the transition to a greener maritime sector will provide substantive benefits to the developing countries, in particular the Small Island Developing States (SIDS) and the Least Developed Countries (LDCs). Decarbonization, marine plastic litter, and biofouling will receive IMO’s programme attention during the year.

On its part, the Commonwealth Heads of Government have jointly prioritised the provision of safe and secure shipping on cleaner seas. These priorities were set during the 2018 meeting of the body, when the long-term vision of growing intra-Commonwealth trade and strengthening connectivity among the countries and their global partners was agreed. With internationally traded goods mostly seaborne, a maritime-led growth is not only feasible but it is also strategic. The agenda, which is to be pursued in a coordinated manner by the member states has the following four policy elements.

a)    Efficiently upgrade hard and soft port infrastructure: In the wake of the COVID-19 pandemic, Commonwealth countries have agreed to carefully prioritize investments in modernizing ports, logistics and customs services. They also agreed to calibrate large port investments through mega infrastructure initiatives with economic risks, using tools such as comprehensive infrastructure master planning and sustainable financing strategies.

b)    Enhance trade liberalization, services cooperation and trade facilitation: This requires that tariff reductions and regulatory coherence should be pursued gradually but consistently. This would be accompanied by trade adjustment programmes to mitigate possible adverse effects on shrinking sectors and workers within them. Comprehensive bilateral and regional free trade agreements such as the African Continental Free Trade Area (AfCFTA) can be useful complements for securing increased market access and the opening of services and investments.

c)    Mitigate growing maritime security threats: The countries also agreed to actively pursue diplomatic dialogue with other multilateral and regional organizations to enhance measures to improve maritime safety. Practical measures to be taken include intelligence sharing, improving relevant technologies, joint exercises, and capacity building.

d)    Decarbonize and digitize to build climate resilience: To thrive in a post-COVID-19 environment, the maritime industry needs to decarbonize and digitize. The overreaching goal is to create a sustainable and resilient maritime industry that protects the marine environment.

It is hoped that the Nigerian maritime stakeholders, including relevant government agencies, will take the appropriate and recommended steps to ensure the country actively participates in the maritime industry’s resurgence, the global sustainability initiatives to drive it, and share in their benefits.

Joy Dimka is a Legal Officer at the Nigerian Shippers’ Council.