From 2020 to today, the cost of maritime transport has globally increased fivefold on average, according to the Freightos Baltic Index. And with 209 ships registered in the Luxembourg Maritime Register for a total tonnage of 1.22m tonnes, this is far from anecdotal for the sector.
"Our members are mainly active in the merchant navy," says Fabrice Maire, president of the Luxembourg and European maritime clusters. Almost half of the vessels registered in the grand duchy are dredgers and bunker boats.
Last month, the cost of marine fuel in Rotterdam reached its highest level since at least the end of 2019.
This increase in rates generates an increase in margins for the sector, but not enough to break out the champagne after a pandemic that marked a clear slowdown in activity, combined with prospects that are difficult to draw.
“Energy costs are very worrying, and unfortunately, these costs will be passed on to the consumer,” says the manager. “Fuel is the most important cost of inland waterway transport. Last month, the cost of marine fuel in Rotterdam reached its highest level since at least the end of 2019,” he adds. Maire cannot imagine prices decreasing: “Not only is the price of oil expected to rise, but the cost of disposing of waste containing oil and grease is also rising.”
Delicate anticipation
Faced with environmental challenges, the sector is trying to react with, for example, LNG, or liquefied natural gas, chosen by the Luxembourg company CLdN for its two new ships expected in 2025. The key to this is a 40% reduction in CO2 emissions. “But we mustn’t forget that LNG must be seen as a transitional fuel because it remains a fossil fuel. The future will have to go towards bio-gas or even e-methane and other synthetic fuels,” says Maire.
We are currently faced with a dilemma: too much demand and not enough ships.
The maritime sector is an essential link in the logistics chain, since 90% of the products we consume transit by sea. However, “we are currently faced with a dilemma: too much demand and not enough ships,” according to Maire. This feeds the inflationary dynamics of the law of supply and demand. And when you consider that it takes years from the signing of an order form to the delivery of a ship, the fuel choice equation becomes even more complicated. “Today, we need to build a ship that is greener than green with technologies that have not yet been tested,” says Maire.
Since 2017, he has been at the helm of the Luxembourg maritime cluster and, since January 2022, the European maritime cluster. This is an opportunity to put the country on the map and to make its voice better heard, particularly in Brussels. “Today, when we talk about ships, we hear Malta or Cyprus, which sounds ‘exotic’. But the Luxembourg flag is recognised for its quality,” he concludes.
This story was first published in French on . It has been translated and edited for Delano.