Tapping technology to stay afloat

SHIPOWNERS are likely to continue to face the prospect of a high-cost environment, which is forcing them to turn towards technology and innovation to stay afloat. Several factors have given rise to cost pressures in the sector and made financing more costly and less accessible, industry players say, and this situation is likely to persist in the near future.

"Shipping is a volatile business defined by changing market demands, freight rates and bunker costs (etc)," Erik-Jan Bakker, vice-president of sales in Asia at Astrium, told The Business Times. "The shipping industry has gone through tough times during recent years and the improvements that have been seen over the past six months are still preliminary and scattered."

Industry observers say the situation has not changed much and some of these factors are likely to erode hopes of a major recovery in the near future. Peter Sand, chief shipping analyst at Bimco in Denmark, said: "Shipowners and operators face multiple cost pressures in today's markets: high bunker prices, low freight rates and regulatory issues that require investments or higher costs going forward."