An inventory of changes and challenges in the maritime sector
Paul Wright FNI, Master Mariner, Associate Director of the Marine Institute at Plymouth University, reviews Britain’s maritime interests and examines some trends
Britain is an island nation but its influence has been global. Plymouth, which recently hosted the Britain and the Sea 2 symposium, is an ocean city. From its sheltered waters explorers, privateers, scientists and navigators set sail to explore the world. They helped to establish the British Empire, on which ‘the sun never set’, and where sea power was critical to worldwide trade and communications.
From the decline of Empire evolved the Commonwealth of Nations, which today covers a quarter of the world’s land area and includes almost a third of the world’s population. In addition, Britain maintains responsibility for the defence of fourteen Overseas Territories, mainly oceanic islands, the final remains of its Empire.
Britain, with a population of 63 million persons, is still a major player in world politics, trade and shipping. It retains extensive economic, cultural, military, scientific and political power, as evidenced by its being one of the five permanent members of the United Nations Security Council. And Britain’s maritime sector remains of critical importance to the economy and survival of this island nation.
Shipping is an industry where the economics of ‘derived demand’ dominate. The health of seaborne world trade and the shipping sector depends on international trade and the economic cycle.
Following World War II international trade grew and shipping prospered. Then recession invoked by oil price hikes in the 1970s caused major problems. With a government unwilling to support ‘lame ducks’, the British shipping industry saw survival in re-registering under offshore flags, replacing British seafarers with cheaper crews and reducing training opportunities for British officer cadets. Ships flying the Red Ensign all but vanished.
A change of government in 1997 led to the adoption of a shipping policy outlined in a document called Charting a New Course. The policy was critical to the continuance of the British shipping industry. A key feature was the establishment of a tonnage tax system linked to training which sought to attract ships to the British Register and provide sponsored training opportunities for new officer trainees. In the five years to 2013 an annual average of 881 young persons were recruited as officer trainees.
At the beginning of 2013 the world’s cargo-carrying fleet consisted of more than 55,000 ships. The British-registered fleet was 1300 ships of 17 million gross tons, the eleventh largest register in the world. The direct financial contribution of the shipping sector to Britain’s GDP is in excess of £6 billion.
Britain has 120 commercial ports. It is a dynamic sector where large capital investments are needed to build the infrastructure required by the latest ships. In 2011 more than 520 million tonnes of cargo passed through UK ports. By weight, liquid bulk cargoes accounted for 46%, dry bulk cargoes 21%, and containers and roll-on/roll-off cargoes 20%.
Of the major port investments presently under way, London Gateway, a container terminal at the mouth of the River Thames, is the largest, and DP World has invested more than £1.5 billion here. When complete, the terminal will provide six deep-sea container ship berths over a quay length of 2.7 kilometres. In 2012 the direct contribution of ports to Britain’s GDP was £7.9 billion.
Maritime business services
The maritime business sector has great importance for Britain and particularly for London. The key business services which London provides includes ship broking, marine insurance, maritime law, classification, banking and ship finance. More than 10,000 people are directly employed in the sector.
The importance of the maritime business sector to the UK economy is recognised by the present government. Steven Hammond, Secretary of State for Transport, recently stated, ‘To ensure this sector maximises its full potential I have established a body of ministers and leaders from across government and industry with a clear focus of maximising growth and opportunities while maintaining a stable fiscal and regulatory environment.’
The Royal Navy at its peak prior to World War I had a fleet of 442 ships. It was the largest navy in the world. Today’s fleet is much smaller, but will have the flexibility to undertake a wide range of tasks relating to the ‘security of British maritime interests’, including ‘presence in zones of tension’ and ‘delivering stability necessary for economic prosperity’.
Whilst the Strategic Defence and Security Review plans to reduce the numbers of Royal Navy personnel from 35,000 to 30,000, the future surface fleet will include the two new Queen Elizabeth aircraft carriers, three ships with amphibious capability, six Type 45 destroyers and replacement of the Type 23 destroyers with thirteen new Type 26 Global Combat ships. In addition the Royal Navy will operate eleven submarines and a range of mines counter-measure, patrol and survey vessels. The Royal Navy is supported by the supply ships of the Royal Fleet Auxiliary.
There has been a gradual reduction in the number and tonnage of fishing vessels over the past decades. However, the British fishing fleet is still of great importance in providing employment and contributing to the economy.
At the end of 2011 there were 6444 British- registered fishing vessels providing work for 12,500 fishermen. Landings of sea fish and shell fish amounted to over 600,000 tonnes with a value of £828 million.
Whilst the greatest number and value of fish are landed in Scotland, the ports of Plymouth, Brixham and Newlyn are dominant in England. In 2011, 14,300 tonnes were landed at Plymouth, making it the largest fishing port in England.
In 2011, oil and gas production from the Britain’s continental shelf satisfied 49% of the country’s energy demand. It is estimated that more than 50% of Britain’s oil and gas demands can be met from the continental shelf to 2020.
The offshore oil and gas industries contribute £40 billion to Britain’s balance of payments and in 2011 paid £11.2 billion to the Exchequer, representing 25% of total corporation taxes received.
The British offshore industry consists of 383 offshore fields and a network of 14,000 kilometres of pipelines linking 107 oil platforms, 181 gas platforms and a large number of subsea installations. More than 32,000 persons are directly employed in the industry.
Britain is a world leader in offshore wind- farm development, and in this specialised area has as much capacity installed as the rest of the world combined. There are 22 offshore wind projects, involving 1075 turbines which can generate 3653 MW of electrical power. It is anticipated that by 2020 offshore wind turbines will produce 18 GW of energy, supplying 20 per cent of Britain’s annual electricity needs. The offshore wind industry directly employs 4000 full-time staff.
Research and development of systems to convert wave and tidal energy to create electrical power is on-going, with a state-of-the- art wave tank especially designed to support such work having been recently opened at Plymouth University.
Subsea activity concerns the highly specialised technologies of engineering and simulation associated with deep-water oil and gas fields and the exploitation of mineral resources found on the ocean bed. Britain has a dominant role in this segment. In the last three years the subsea sector has created 16,000 jobs and grown by 50%. The UK subsea sector has 45% of the £20 billion global market.
Around the English and Welsh coastline are six marine aggregate licence areas, from which 19 million tonnes of sand and gravel are extracted annually, 20% of total national demand. The sector employs some 640 persons, including seagoing personnel.
Trends and challenges
The world is at a critical juncture in human history. In spring 2013, a report on Global Marine Trends 2030 was published by Lloyd’s Register Group, QinetiQ and the University of Strathclyde. This is an authoritative publication which considers the future of the maritime industries. The foreword notes that: As we enter the second decade of the twenty-first century, our business environment is becoming more complex, global and multi-polar.
The new economic configuration which is emerging poses both challenges and opportunities for the maritime industries: These will have profound impacts on commercial shipping requirements and natural resource exploitation; emerging shifts of geopolitical configuration where future competition and conflicts between nations is more likely to involve future competition at sea.
The publication considers the key global drivers of change – population, world economy, resources and environment. Using three different scenarios, consideration is given to how the commercial, offshore energy and naval sectors of the maritime industry will look in 2030.
Change is a feature of the human condition, and the future will see more of it. Overall, the British maritime sector has responded positively in the past, and it looks set to meet future challenges in a similar way.