Global Trends Affecting the Shipping Industry Research Paper

Introduction

            It is known that trends in the macro global environment have a strong impact on certain management factors, including the nature of work, the make-up of the workforce, etc. These factors require developing and implementing new strategies and ways of doing things. There is a need for considering these trends, while developing the proper strategies to improve the performance of capital investment and enhance operational efficiency of the industry. According to researchers, “the shipping industry has strengthen its effort to get some forms of control on the key stages of the transportation chain” (Fabbri, 2003, p. 435). However, the impact of global trends on the key management functions is enormous because of the need to maintain sustainability of the industry. Shipping companies and crewing companies face a number of problems that affect productivity and performance. Among them are “the explosive growth of mixed nationality crews, and technological and economic changes which have reduced crewing levels and extended working hours” (Bloor et al., 2010, p. 329). The purpose of this research paper is to explore the global trends that may affect the shipping industry, placing emphasis on the dynamics of these trends in order to have a good understanding of what management changes can be anticipated to deal with the challenges caused by the impact of global trends.

Global trends affecting the shipping industry

            Social-Demographic trends

            Because of the shifts in global demographics which lead to ongoing population growth rates, there may be certain implications for the shipping industry over the course of the next 5-10 years. The emergence of globally diverse workforce requires the HR managers to apply the proper policies to ensure that the shipping industry is successful. According to recent study, multicultural ships crews is not a new phenomenon in the field of shipping. Different ethnic and cultural backgrounds of workforce, weak English and other problems create adverse working environment, lack of communication and misunderstandings (Horck, 2008). Besides, recent studies show that “higher level of transparency is needed to improve human rights in the shipping industry” (Transparency to Protect Human Rights in Shipping Industry, 2017). Although the Maritime Labour Convention of 2006 guarantees the right to decent work conditions, many seafarers are “vulnerable to exploitation and abuse when working in isolated conditions” (Transparency to Protect Human Rights in Shipping Industry, 2017).

            Economic trends

            It is known that long-term economic growth in a number of developing markets may have considerable impact on the shipping industry. The issues like income inequality, global poverty, recession, the growth of multinational companies, increased energy prices and development of new trade policies have direct relation to economic trends in the shipping industry. Currently, the shipping industry is the one that operates at the global context and depends on the effects of inflation and other economic factors. High oil prices require the shipping industry using new technological development which depend on investments. Enhancement of the performance of ships through the use of bio fuels and gas requires utilizing external financial sources.

            Political/legal trends

            There are several political and legal issues that affect the shipping industry to a great extent. These issues include international policies and regulations that facilitate international shipping and establishment of business – government relations. In addition, terrorism affects the shipping industry (James & Van Dell, 2011). Researchers suggest that “security requirements and wartime priorities are compelling the worlds governments to more closely monitor and inspect all vessels and cargo entering their nations ports” (James & Van Dell, 2011, p. 1). The fact that the US Coast Guards inspections are implemented to identify possible threats means that tremendous delays upon entering ships create serious problems for shipping companies. According to research findings, “the consequences of losing millions of dollars daily both for shipping companies and cargo interests create severe economic and logistical problems that impact all transportation modes” (James & Van Dell, 2011, p. 1).

            Technological trends

            The fact that technological trends like new scientific methods, the growth of the Internet connectivity and the popularity of virtual work have a considerable impact on the shipping industry means that technology shapes the industry in a positive way. Robotic technologies are developed to facilitate various operations and make the shipping industry more productive. Recent report shows that new robotic technologies can transform ship design and building, as well as can have a positive impact on safety, commercial and operational performance (Peters, 2016). Due to big data analytics, it is possible to “use algorithms to look at correlations between the different forms of data” (Peters, 2016, p. 1). Recent research findings point out to the fact that new types of robots can be used in commercial shipping, including “a learning robot; one that can handle an asset – dubbed a practical robot; and a mini-robot, potentially used for inspections in harsh environments, for example to identify and record emissions and pollutants” (Peters, 2016, p. 1). Sensor technologies, the growth of WiFi and 5G connectivity and power and propulsion technologies can enhance the performance of the shipping industry.

            Environmental trends

            Recent studies show that as the Earth is warming up faster than in past decades, it is critical to consider climate change as a key environmental factor that can have an adverse impact on the shipping industry. The growth of temperatures caused by the increased greenhouse gas emissions from various human activities leads to changes in the natural environment. On of these changes is a low level of sea ice in the Arctic. This fact means that the shipping industry will suffer from global warming.Recent research findings show that emergence of abnormal amounts of icebergs  have already drifted into North Atlantic shipping lanes. The fact that there are about 450 icebergs in North Atlantic areas of shipping means that the number of accidents could be increased. Many vessels have to change their routes in order to avoid accidents caused by collision with icebergs (Lasserre & Pelletier, 2011). According to researchers, “Beyond the seemingly decisive advantage of Arctic routes, however, there remain many obstacles to navigation” (Lasserre & Pelletier, 2011, p. 1465).

            At the same time, researchers state that the rapid Arctic summer sea ice reduction may provide an opportunity for the growth of cargo transportation in the region. They found that “average sailing times on the North Sea Route along the Siberian Coast have fallen from 20 days in the 1990s to 11 days in 2012–2013, attributed to easing sea ice conditions along the Siberian coast” (Akenov et al., 2017). Nevertheless, it is critical to recognize existence of economic risks caused by exploitation of the Arctic shipping routes. Evaluation of navigability of the Arctic sea routes allows drawing relevant conclusions on the performance of the shipping industry. There may be negative impacts caused by “more fragmented thinner sea ice, stronger winds, ocean currents and waves” (Akenov et al., 2017). Statistical data shows that “summer season sailing times along the route via the North Pole are estimated to be 13–17 days, which could make this route as fast as the North Sea Route” (Akenov et al., 2017, p. 300).

Discussion of how each trend may affect management in the shipping industry

            Each trend identified in this paper may have considerable impact on management in the shipping industry. Social-demographic trends affect organizational culture because of the need to address diversity related problems, ensure anti-discrimination policies and provide positive organizational climate through employee training and professional development. Economic trends have a strong impact on management in the shipping industry because the key management practices depend on establishment of an effective organizational design which requires additional costs. For example, the issues that may shape organizational design include assessment of the level of consumer confidence and resolving employment problems. Political/legal trends affect various management practices in the shipping industry because managers should comply with the established rules and regulations, as well as consider political context to avoid international conflicts. According to experts, managers in the shipping industry are “expected to have sufficient knowledge of the subject matter relating to the ships for which they are responsible and be able to apply the law to these ships as required” (Dickie, 2014, p. 11). Technological trends affect management processes because new technology contributes to the ongoing change in the all units of the shipping industry. These trends lead to change in the context of any organization within the shipping industry. As a result, the nature of work can be changed significantly. Environmental trends affect management practices within the shipping industry because of the need for utilizing environmentally friendly approaches, methods and tools that do not cause damage to the environment. It is important for mangers to use valuable management tools that helps to organize tasks effectively and promote collaboration between employees. 

Description of the actions that should be taken to deal with the change posed by the identified trends

            As a manager in the shipping industry, I should take several actions to deal with the change posed by each of the above mentioned trends. I need to initiate professional development and training courses for employees who will work with new technological tools and who need to make decisions without involvement of other employees. Actually, this action is important both for employees and the shipping industry because it creates opportunities for enhanced productivity and performance. Besides, I need to strengthen cultural diversity policy in order to avoid racial inequality and age discrimination in the workplace. I will pay special attention to selection of the proper forms of work, assessment of dynamism, creativity and flexibility in the workforce, and addressing the issues related to demographics, employee motivation and job satisfaction. As a shipping manager, I need to focus on “organizational green shipping management capability, specifically regarding policies, ships, and suppliers, to improve their environmental and financial performance” (Lirn et al., 2014, p.159).

            Actually, these actions can alter what is currently done by management in organizations within the shipping industry. I would manage differently as a result of this dynamic. The actions I would take to deal with the change posed by each trend should be supported by organizational policy. Currently, shipping companies are based on the use of their own forms of structured management systems which allow them to perform the key operations effectively (Dickie, 2014). The trends outlined in this paper bring visible changes in the organizational design and management of the key business operations.

            The fact that the future of the management function in the shipping industry is clear means that due attention should be paid to the administrative function of managers. At the same time, managers should be presented as guides for maintaining organizational effectiveness and strengthening its business strategy. In the shipping industry, management is the key determinant of competitive advantage. The success of the shipping industry depends on the ability of managers to resolve serious problems relevant to knowledge management, change management, capability building, conflict management, etc. There are five functions that should be performed by managers, including planning, organizing, staffing, leading, and controlling (Madar& Neacsu, 2016).

            Moreover, the shipping industry needs to develop the proper strategy for maintaining sustainable competitive advantage. According to researchers, “human resource management can be conceptualised as a source of competitiveness” (Progoulaki & Theotokas, 2010, p. 575). Currently, shipping companies face a number of challenges in the management of their human resources. As a result, the formation of sustainable competitive advantage is at the low level. Considering the impact of global trends, it is necessary to develop an integrated framework for managing human resources in the shipping industry to promote collaboration in the areas of technology, environmental science, economics and other areas. This fact means that management practices should be developed to meet the needs of the shipping industry.

Discussion of what skills a manager need to handle the changes posed by the identified trends

            As a manager in the shipping industry, I will need the following set of skills to handle the changes: communication skills, conflict management skills, decision making and problem solving skills, and analytical skills. Managers in the shipping industry bear responsibility for overseeing various organizational processes and employees engaged in these processes. Undoubtedly, shipping managers should have strong leadership skills and multitasking skills. In addition, they need to have strong interpersonal skills that will help them to establish healthy interpersonal relationships. 

Conclusion

            Thus, it is necessary to conclude that the shipping industry helps to connect different countries and culture across the world. The exchange of goods allows people from different cultural backgrounds to pursue common goals. The shipping industry is affected by five global trends, namely social-demographic trends, economic trends, political/legal trends, technological and environmental trends. Considering the impact of these global trends on the management practices within the shipping industry, it is critical to make changes in the areas of communication, collaboration and control. Due attention should be given to training of employees in order to help them adapt to the changing management practices.

References

Aksenov, Y., Popova, E., Yool, A. et al. (2017). “On the future navigability of Arctic sea routes: High-resolution projections of the Arctic Ocean and sea ice,” Marine Policy, 75: 300-317.

Bloor, M., Thomas, M. & Lane, T. (2010). “Health risks in the global shipping industry: An overview,” Health, Risk & Society, 2(3): 329-340.

Dickie, J. W. (2014). Reeds 21st Century Ship Management. A&C Black.

Fabbri, P. (2003). Ocean Management in Global Change: Proceedings of the Conference on Ocean Management in Global Change, Genoa, 22-26 June 1992. CRC Press.

Horck, J. (2008). “Cultural and gender diversities affecting the ship/port interface,” ISPIC, Bremen 19-21 May 2008. http://www.knowships.org/pdfs/Cultural-Sensitivities-3.pdf

James, A. P. & Van Dell, H. G. (2011). “The impacts of the war on terrorism on maritime shipping,” International Business and Economics Research, 1(8): 1-12.

Lasserre, F. & Pelletier, S. (2011). “Polar super seaways? Maritime transport in the Arctic: an analysis of shipowners’ intentions,” Journal of Transport Geography, 19(6): 1465-1473.

Lirn, T., Lin, H. & Shang, K. (2014). “Green shipping management capability and firm performance in the container shipping industry,” Maritime Policy & Management, 41(2): 159-175.

Madar, A. & Neacsu, N. A. (2016). “Quality management in shipping. Case study: Maersk Line Denmark,” Bulletin of the Transilvania University of Brasov Series V: Economic Sciences, 9 (58): 139-150.

Peters, G. (2016). “Shipping 2030: technologies that will transform the industry,” Ship Technology. https://www.ship-technology.com/features/featureshipping-2030-technologies-that-will-transform-the-industry-4716366/

Progoulaki, M. & Theotokas, I. (2010). “Human resource management and competitive advantage: An application of resource-based view in the shipping industry,” Marine, Policy, 34(3): 575-582.

Transparency to Protect Human Rights in Shipping Industry. (2017). World Maritime News. https://worldmaritimenews.com/archives/222446/transparency-to-protect-human-rights-in-shipping-industry/

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[Accessed: November 26, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 26, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 26, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 26, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

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