In January of 2020, maritime law changed in order to continue protecting the environment but potentially sacrificing the affordability of transport services across the seas. The International Maritime Organization (IMO) is the special agency appointed through the United Nations that takes care of the safety and security of the shipping trade but also prevents pollution of the seas and waterways by ships. The changes implemented this past January will affect the maritime industry and the ability of organizations to generate a healthy profit.
The change for shipping companies is a global marine fuel sulfur cap. So long as the implementation rate is high enough, the environment benefits. However, diesel prices will increase as the low-sulfur oil demand increases, but this will equate to higher freight rates. This is bad news for consumers. Additionally, the slower speeds will help the environment but frustrate consumers with increased travel times.
As the travel struggles increase for consumers, the industry will suffer from a limited transport capacity. With a capacity cut, the market may experience shifts in the supply-demand balance, with smaller carriers being the most vulnerable. The overall benefit, in order to compensate for the changes in routine and servicing, comes from developing a better discipline to stay relevant to the industry. Preparing for these adjustments can help a shipping company strategically plan for the future.