The severe impact of drought due to rising temperatures, which became very apparent to shipping organisations as the operation of one of the world’s most crucial waterways, the Panama Canal, was affected. In addition, net zero transition and liability risks are expected to increase in future as companies invest in new, largely untested low-carbon technologies to transform their business models.
Ranked 8 Political risks
and violence Unsurprisingly, given ongoing conflicts in the Middle East and Ukraine, and tensions between China and the US, political risks and violence (14%) is up to 8 from 10. 2024 is also a key election year. As much as 50% of the world’s population could go to the polls, including in India, Russia, the US, and UK.
The persistent assaults on commercial ships navigating the Southern Red Sea represent a concerning pattern that has raised alarm within the industry, leading to changes in routes and disturbances in global supply chains.
Dissatisfaction with the potential outcomes, coupled with general economic uncertainty, the high cost
of living, and growing disinformation fuelled by social media, means societal polarization is expected to increase, triggering more social unrest in many countries.
Ranked 9 Market
developments Protectionism is one of three paradigm shifts identified as being behind market developments (13%) rising to 9 in the top global risk rankings in 2024 from 11 the previous year.
However, there is some hope among Allianz Risk Barometer respondents that 2024 could see the wild economic ups and down experienced since the Covid-19 shock settle down, resulting in Macroeconomic developments (19%), falling to 5 from 3. Yet economic growth outlooks remain subdued at just over 2% globally in 2024, according to Allianz Research.
“This will give central banks some room to manoeuvre and lower interest rates are likely in the second half of the year. A caveat is the considerable number of elections in 2024 and the risk of further upheavals depending on certain outcomes,“ said Ludovic Subran, Chief Economist at Allianz.
Ranked 10 Shortage of
skilled workforce In a global context, the shortage of skilled workforce (12%) is seen as a lower risk than in 2023, dropping from 8 to 10. However, businesses in Central and Eastern Europe, the UK and Australia identify it as a top five business risk.
Shipping is no exception, as an historic peak has been reached in the shortage of officer supply, and there are no anticipated improvements, resulting in an increase in manning costs, as indicated in the Manning Annual Review and Forecast 2023/2024 report by Drewry.
There is a need for the industry to train seafarers on the necessary skills and competencies for the successful implementation of new technologies related to decarbonization, such as alternative fuels and automation.
Given there is still record low unemployment in many countries around the globe, companies are looking to fill more jobs than there are people available to fill them. IT or data experts are seen as the most challenging to find, making this issue a critical aspect in the fight against cyber-crime.
You may request to download a free copy of the full review at
https://bit.ly/3vE5rNA.
THE REPORT | MAR 2024 | ISSUE 107 | 105
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