Black swans: anticipating future shocks to shipping, reports a Seatrade Maritime news.
Black Swan
Should shipping have access to some sort of agency that can forecast something more than the economic drivers to freight rates – the political, strategic or human interventions that expose the industry to major risks?
At a time when “black swan” events are arriving in flocks, flotillas or even fleets, maybe there is a case for the sort of industry think tank that can range rather more widely than the markets to assist in identifying vulnerability and building resilience.
History informs us that most of the biggest shocks to the shipping industry have tended to be unexpected, exposing the whole sector to huge uncertainty. Think on the closure of major waterways, the outbreak of wars and the imposition of consequential trade sanctions, financial instability or banking collapses, natural disasters or policy changes. By their very definition as “black swan” events, it is unlikely that even the most perceptive seer would be able to accurately forecast such occurrences.
Who was able to forecast whether President Putin was actually going to invade Ukraine in February this year, even though there had been every evidence that this was his intention? Why did the explosions in the Baltic Sea which damaged the gas pipelines seem such a huge surprise that almost overnight demonstrated a level of vulnerability in the undersea movement of both energy and data? Why did the blockage of the Suez Canal by the monster Evergreen containership cause such a furore, even though the risks had been presumably understood? And why should shipping be any better at its intelligence, when some of the world’s great financial brains failed to anticipate the meltdown in 2008, or indeed the shocks of the present problems.
Probability of risks to property or people
Nobody is ever going to be able to foretell the future, but just as the world of insurance is quite well equipped to assess the “probability” of risks to property or people, there is a case for a system which could provide early warning alerts to shipping company leaders, who may not have even thought of such vulnerability.
It is also a fact that such is the “segmentation” of the shipping industry into its various sectors that people tend to focus on their immediate business sector and are often woefully ignorant of the bigger picture and the interconnected nature of the industry.
Such an agency – call it, for argument, the Institute for Strategic Shipping Studies – would not need to be large, or expensive, but would be international, to serve a global industry and accommodate a wide range of skill and experience. It could take the form of a correspondence group of the necessary experts, able to exchange their ideas freely; offering a more strategic overview of the developing risks than any individual or national body. It could be a co-operative venture in which members of the International Chamber of Shipping, class societies and other technical agencies might share ideas.
Environmental experts and military thinkers
Such a body ought to be the one asking the “what if” questions that will provoke more thought about various scenarios that could emerge and provide major challenges to the maritime world. It may not change policy but could sharpen strategic thought by considering the currently “unthinkable”.
It would need a range of skills that would include, besides the obvious economists, shipping professionals, engineers, environmental experts and military thinkers. And besides identifying the risks which might conceivably divert the industry from its course, it could suggest a range of mitigating strategies, which, because “somebody” has thought of them, will not prove such a surprise if, one day, there are black swans berthing in the harbour.
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Source: Sea Trade Maritime
