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How shipping managed the pandemic's first year

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Passenger traffic has been hit hard, lines have been closed and crews laid off. But in Sweden, cooperation between industry and the state has nevertheless worked relatively well to mitigate the effects of the pandemic on shipping. A new pre-study produced by researchers from University of Gothenburg and Chalmers University of Technology takes a closer look at Swedish shipping's crisis management capability during the pandemic's first year.

It was above all the Swedish passenger traffic that suffered large losses after losing more than 50 percent of the passengers in 2020. Some shipping companies saw a loss of more than 90 percent and lines had to be closed.

- It went very fast in the beginning. Lines were closed, people were laid off and here in Sweden many thought that the financial help did not come fast enough. But in general, dissatisfaction has nevertheless been greater in other European countries, where the shipping companies quickly ended up in the hands of the banks, which proved to be less helpful than expected. Some did not offer any support, while others made it very difficult to get in practice. In Sweden, the financial support was mainly governmental, says Ceren Altuntas Vural, one of the researchers behind a Lighthouse pre-study that looks closely at the effects of the corona pandemic on shipping.

The pandemic outbreak forced collaborations, both within the shipping industry and with parties outside. With the help of various new digital tools such as video conferencing and through the sharing of monitoring data, shipping could, for example, ensure that supply chains continued to function. But while the "internal" cooperation has worked well, the report shows that shipping, perhaps because it is too internally focused, has difficulty reaching outside its own sector despite having a key role for society to function. Therefore, there were not only problems with financial support but the industry was also challenged lack of flights for crew, various requirements around testing, quarantines and lockdowns – things that collaboration could have solved.

- A big lesson learned from shipping is that you have to learn to communicate and become better at collaborating with other industries.

The study of shipping's first year with the pandemic will be followed up by a second part that focuses on the effects in the slightly longer term. Marta Gonzalez-Aregall, a researcher at the University of Gothenburg who also worked on the study, believes that the importance of digitalization will be felt even more.

- In the industry, a lot is being invested right now in digital tools that can secure the supply chains in the future. They are very much about route planning and saving time, but also about safety, she says.

A sad effect of the pandemic is that it put a damper on environmental and sustainability work in shipping. According to a survey conducted by the European Shipowners' Association ECSA among its members, almost half of them believe that their planned environmental initiatives are no longer possible.

- For many small shipping companies in Europe, it is now a matter of survival. You have to get back on your feet before making such investments. So unfortunately, it will be difficult to achieve the climate goals in the next few years. In Sweden it looks different. Here, people are generally more environmentally and sustainability conscious and many companies have understood the importance of investing in sustainability. Sweden is leading the development, says Marta Gonzalez-Aregall.

Download the report

The prestudy The effects of the coronavirus pandemic on the Swedish shipping industry and its resilience capabilities has been authored by Ceren Altuntas Vural (Chalmers), Marta Gonzalez-Aregall (School of Business, Economics and Law, University of Gothenburg) and Johan Woxenius (School of Business, Economics and Law, University of Gothenburg).

About Lighthouse

Lighthouse gathers leading maritime stakeholders through Triple-Helix collaboration between industry, society, academia and institutes for research, development and innovation within the maritime sector. University of Gothenburg and Chalmers university of technology are two of the partners in Lighthouse.

BY: Lars Nicklason, Chalmers, communications manager Lighthouse