Cyber security, geopolitics, operating costs and changes to laws and regulations are among the greatest risks to the shipping sector, according to business advisors Moore Stephens.
In its third annual Shipping Risk Survey, Moore Stephens identifies the factors impacting the sector as well as what needs to be done to effectively deal with newly emerging risks.
The report found that in the past 12 months, risk management within the industry has improved slightly and that management of exposure to risk must be enhanced.
The survey reveals among others that “the standard of risk awareness and response capability in many shipping companies is below the required levels”, said Michael Simms, a Moore Stephens partner.
Indicatively, respondents gave an overall score of 6.8 out of a possible 10.0 to whether business risk management is contributing to the success of their organization (last year the score was 6.6) with charterers at the top (8.8), followed by owners (6.9) and ship managers (6.8). Brokers returned the lowest rating at 6.3. Geographically speaking, Europe (7.0) was ahead of Asia (6.6), but the Middle East scored the highest at 7.8.
Approximately 30 percent of respondents (compared to 35 percent in the last survey) confirmed that risk was managed by means of discussion without formal documentation.
Demand trends, meanwhile, were the leading concern in Europe, Asia and the Middle East, while respondents in Latin America and North America identified competition as posing the highest level of risk.
“Companies engaged in the shipping industry must up their game in terms of implementing effective corporate governance systems, monitoring procedures and controls throughout their organisations, because the level of risk is not only increasing but also changing in nature,” said Simms.