Goods flowing along the world's seaways are showing signs of slowing
International and regional shipping operators and financiers are to gather in Dubai in December to assess the impact of global financial market turbulence and the economic downturn on the Middle East maritime industry.
"Western economies are teetering on the edge of recession, with downside risks which present challenges for the regional industry, though not as intense as for other regions," said Christopher Hayman, Managing Director of Seatrade, organisers of Seatrade Middle East Maritime 2008 - the region's leading maritime event.
"Just as money is no longer finding its way easily around the global financial system, so goods flowing along the world's seaways are showing signs of slowing," he added.
"New forecasts on containerised imports from Asia to Europe, for example, show we could see a fall in growth from 15% in recent years to 4-5% this year."
Seatrade Middle East Maritime runs from 14-16 December at Dubai International Convention and Exhibition Centre under the patronage of HH Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai.
The crucial debate on shipping economics takes place at the Middle East Money and Ships conference (December 14-16), which runs alongside the Seatrade exhibition. High level speakers from international and regional banks specialising in maritime finance along with leading regional shipping operators will be taking part.
The region plays an important role in world shipping with the Arabian Gulf now one of the most active international maritime centres in the world. As well as being pivotal in global energy-related transport, economic growth across the region has driven record volumes of containers and increasing bulk cargo.
"While the downward cycle may put a damper on activity, at least in the short term, the fundamentals of shipping remain in place," Hayman said.
"Strategies may need to be adjusted for the new financial era we are entering but the maritime industry will continue to be the lifeline of the global community.
"What is happening is a financial crisis not a shipping one. While its effects are global, the Middle East and Asia will suffer less than other regions.
"New sources and structures of ship financing will emerge to ensure the industry pulls through the turmoil. But undoubtedly shipping companies are going to have to be more transparent when looking for credit. Banks too will need to understand more about the shipping business to make informed risk assessments. Those financial institutions that have specialised in the industry are likely to find greater success."
Other crucial topics to be debated at the Money and Ships conference include energy and dry bulk transportation; shipbuilding and repair; fuel, emissions and green technology; port construction and development; and the challenges of recruitment, training and retention of crews.
Another challenge for the regional industry is the impact of the ban on single-hull oil tankers trading in the waters of the United Arab Emirates after 2010. The International Maritime Organisation, the UN agency responsible for maritime safety and preventing pollution from ships, says all vessels more than 20 years old must be withdrawn from service while all single-hull vessels have to be replaced by double-hull ones by 2010.
The Marine Affairs Department of the UAE National Transport Authority recently made it clear no single-hull tankers will be allowed to trade in the UAE after the 2010 deadline. "Marine safety is a top priority for ship registration in the UAE and vessels that do not meet our safety requirements cannot operate here," a statement said.
Gulf charterers of very large crude carriers have increased the number of double-hull tankers and have steered clear of single-hulls, which are already turned away from some ports in Europe and the US. The trend has pushed up tanker rates.
The Seatrade Middle East Maritime exhibition and conferences are held every two years and have evolved into one of the world's fastest-growing maritime events, ranked among the industry's Top 10 largest.
In 2006 the event was the biggest yet notching up record attendance of 6,000 trade participants from 63 countries - 45% from outside the region. In 2008, the organisers expect participation to increase by 30%.
Principal sponsors of Seatrade Middle East Maritime 2008 include GEM, Det Norske Veritas, Dubai Maritime City, NITC and Gulf Marine. Other sponsors are: ABS, BP Marine, ClassNK, Drydocks World, Emarat Maritime, Ince Al Jallaf & Co, Lloyd's Register, Nico International, Rais Hassan Saadi Group, SAIFEE Trading and Sea Cloud Cruises.
The event is supported by Dubai Chamber of Commerce and Industry, DP World, Dubai Shipping Agents Association, Dubai Department of Tourism and Commerce Marketing, the International Association of Ports and Harbours, the Nautical Institute, the Royal Institute of Naval Architects, ImarEST, and the UAE Ship Owners Association.