Change is a constant in our industry, so I would always be cautious about saying things have changed ‘irrevocably.’ One of the biggest opportunities — and challenges — we face is the move toward green fuel and the deployment of energy-efficient technology.
This industry-wide shift presents us with a range of options, from the expansion of multi-fuel port ecosystems and exploration of green hydrogen to the establishment of green corridors and introduction of sustainable building practices. We are already seeing a rise in the number of orders for new alternative-fuel capable vessels, using liquefied natural gas (LNG), methanol, or ammonia, as well as the retrofitting of existing fleets for alternative fuels.
In addition, we are seeing the development of ‘green port’ infrastructure, for example the introduction of LNG bunkering. Increasingly, all players in the supply chain are recognizing the importance of developing a multi-fuel portfolio.
There are obvious financial implications for these investments. According to research from the Global Maritime Forum, the scale of cumulative investment needed between 2030 and 2050 to achieve the International Maritime Organization (IMO) target of reducing carbon emissions from shipping by at least 50 percent by 2050 is approximately $1 to 1.4 trillion, or on average between $50 to 70 billion annually for 20 years. Getting these decisions right will be critical for our industry.
Beyond that, the constant we are seeing is the ongoing demand for better connectivity, faster turnaround times, and deployment of digitalization to track real-time information and enable data exchange.
Globally, we are likely to see slowing demand for transport and logistics and a decline in freight rates, driven by a slowing economy and easing of supply chain congestion.
Within some of our key regions such as MENA, Indian Subcontinent, Red Sea, and Turkey, however, trade is predicted to continue growing. The UAE-India Comprehensive Economic Partnership Agreement, which was signed at the beginning of 2022, is already delivering increased UAE-India trade. China is also a key growth area. China-UAE bilateral trade rose 28 percent in the first eight months of 2022, to reach $64 billion.
We are anticipating growth from a short sea and regional perspective on the volume side, which we need to be positioned to meet, in the context of a wider global recessionary climate.
There is an opportunity to improve end-to-end supply chain visibility, providing customers with real-time data and a holistic understanding of their partners across the supply chain. By making key decision factors available — such as real-time location, production rates, and delivery schedules of raw materials, components, and final products across the global supply chain — it becomes easier to identify disruptions, mitigate their impact, and improve productivity across the logistics ecosystem.
We also see an opportunity to introduce more resilience and connectivity for key markets that are currently underserved by the global shipping markets. Our 2022 acquisition of an 80 percent equity stake in Dubai-based Global Feeder Shipping (GFS) provides us with an opportunity to strengthen our hub and spoke model by linking core markets to key port assets such as Khalifa Port.