2024 forecasts for the Shipping market
In recent days, maritime news has been affected by various announcements, including those regarding the Emissions Trading Scheme (ETS) and the new alternative route to the Suez Canal.
Indeed, the EU is stepping up its efforts against climate change. Starting from January 1, 2024, maritime emissions will be subject to the SEQE (or EU ETS – Emission Trading System).
Ships operating in European waters will be required to adhere to strict limits on CO2 emissions. The maritime SEQE will result in the establishment of emission quotas.
This initiative is applauded by environmental advocates, especially considering that maritime transport is one of the largest CO2-emitting sectors globally. This was emphasized during COP27 with the launch of the Green Shipping Challenge.
Furthermore, in response to the growing threats in the Red Sea, four of the five largest container shipping companies in the world, namely CMA CGM, Hapag-Lloyd, Maersk, and MSC, have either interrupted or suspended their routes through this region in favor of the Cape route. Additionally, the Chinese New Year of February 2024 is also a factor to consider.
These developments have consequences for the maritime market:
1. Increased costs: investment in cleaner technologies, purchase of emission allowances, fleet renovation, etc…
2. Extension of Delivery Times: When going through the Cape, the travel duration increases by about ten additional days. Moreover, to avoid exceeding their emission quotas, maritime companies might be tempted to reduce their speed.
3. Supply Chain Instability: Extended transit times and an increase in empty voyages can lead to disruptions.
4. Change in Mode of Transportation: To address disruptions, some goods may opt for air or rail transport, potentially resulting in capacity constraints and higher costs in these alternative modes of transportation.
