Nearshoring – society and supply

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How far is this supposed trend for “onshoring” going to cement itself into our industrial landscape? It’s a valid question, especially when it is asked against some of the other major changes that are looming on the maritime horizon.

It could be seen as a sensible response after supply chain vulnerabilities have been exposed by the pandemic and exacerbated by the disruptions to normalcy caused by the Russian attack on Ukraine and the spectacular demonstration of the industry’s dependence on the Suez Canal. An increasing number of industrial movers are beginning to suggest that they shouldn’t be so dependent on transporting goods from the other side of the world if they can’t rely on them to arrive on time.

That view seemed to jibe with other doubts, raised by the extraordinarily high cost of liner shipping over the past year, undermining both the security of a quick and regular supply of goods and the benefits of using cheap manufacturers in China and elsewhere. Oddly enough, the lessons of a slavish reliance on just-in-time delivery and not holding buffer stocks have been less talked about — bean counters in senior management never like to admit a mistake.

But there are also more subtle societal drivers that those whose businesses are connected somewhere along the supply chain should think more seriously.

A few years have passed since the arrival of a first-class container giant in European ports was greeted not with celebratory applause as an expression of advanced maritime technology, but rather with environmental and other activists concerned about the impact of the voyage with all the “stuff” inside the giant Stack of loaded containers. Their protests wowed the media more than the sleek and deeply laden ship itself. But perhaps that was a sign that times and attitudes had changed.

It’s a societal view that has grown rapidly and is even becoming mainstream—a sort of puritanical narrative that bemoans the misuse of the world’s resources and waste, emphasizes the virtues of non-consumer goods, and articulates a general disapproval of capitalism and consumerism. It fits comfortably with ideas of “shaming” people with SUVs or those who like to enjoy long-haul air travel. This is evident in the promotion of veganism, the call for a ban on hydrocarbons and the general fight against all forms of atmospheric emissions.

One might surmise that this is a phenomenon confined to the middle class, ‘Generation Z’, in the developed, industrialized areas of the world, and that such ideas are not shared by those who tend to have less and tend to want more. But although these are people who consume the most but seem determined to consume less and are effectively committed to these goals, one might suspect that there may be some negative but unstoppable impact on maritime trade growth in the future becomes.

And rather less subtle will be the – yet – unquantifiable effect of significant increases in marine fuel prices, a consequence of the introduction of low-carbon, sustainable fuels, whatever might come out of refineries to power the world fleet. And perhaps the message that the “net-zero” ambition has a real price is beginning to register among merchant ship users who, with brief interruptions, have enjoyed the benefits of cheap sea transport and adapted their economic strategies accordingly. So if you are looking for another reason to shorten your supply chain in the medium term or to encourage local manufacturing of goods that are currently coming from far away, this will surely be on your agenda.

None of this will happen immediately, but it is a background trend that will be increasingly noticeable over the lifetime of all of these huge ships that are newly commissioned and built today. So you have to hope that people in the upper echelons of the maritime world, in shipping and shipbuilding companies, which together represent the prime example of derived demand, will give some thought to these issues, even if they may still be a dark shadow on their horizon.

Source: News Network.

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