THE future of commercial shipping is dire in most of its conventional forms, according to industry veteran Ravi Mehrotra, as result of the “Fourth Industrial Revolution” which brings increases in domestic production through lower labour and energy costs via technological innovations.

The emerging term generally refers to the new manufacturing technologies merging digital and physical spaces, such as 3D printers, that are coming to light after the first industrial revolution in mechanisation, water and steam power in 1760-1820, the second in mass production, assembly and electricity in 1870-1947, and the third in information technology and automation in 1950-1992.

In the inaugural Tom Leander Memorial Annual Lecture, named after the late Lloyd’s List Asia editor-in-chief, the Foresight Group’s executive chairman will say the latest industrial revolution is hitting the main shipping sectors as robotics, artificial intelligence, 3D printing, digital and nano technologies are maturing.

“The main objective of Fourth Industrial Revolution is to lower the cost of labour and energy as we have got accustomed to it,” Mr Mehrotra will say at Cambridge Academy of Transport on Friday. “[This] changes the fundamentals of global supply chains.”

The new, innovative manufacturing methods would require less infrastructure in the developed and developing nations and a limited labour force, he will say. Conventional needs of manufacturing and energy will be reduced, with the emergence of sharing economies such as Uber, which would cut overall demand of vehicles and renewable energy. And 3D printing means manufacturing at the point of use, he will add.

But all those changes will have negative impact on conventional shipping. “One thing is certain: the long-term growth in manufacturing and shipping is over,” he will say.

“Manufacturing from low-cost labour countries flooding the developed world with cheap industrial goods is over.”

According to Mr Mehrotra, who derives his predictions from Clarksons and Danish Ship Finance data, the annual growth of seaborne import volume will decline to 1.2% in 2015-2030 from 3.7% in 2000-2015. On the supply side, he forecasts annual newbuilding deliveries range between 76m-102m gt in 2016-2021 and removals between 20m-26m gt during the same period.

Those numbers point to vessel oversupply. “We are under-utilising our fleet. Utilisation is only 80%,” he will say.

“Our capital employed in shipping is under-utilised and resulting in low or negative returns.”

“It is very difficult for the shipping industry to survive in its present form… the companies that will survive will be large, highly efficient, have access to funding and will probably be more corporate.”

However, the effect of changing ways of production will be uneven over the different shipping sectors. Mr Mehrotra will point out the container sector will be the hardest hit, with forecast increase of local production. Tankers will be relatively supported as consumption by China and India — where domestic reserves are limited — continues to pick up.

Moreover, with the world’s ageing population, especially in the developed world, Mr Mehrotra will predict the boom of cruise shipping. “As import and export of cargo volumes in the developed world reduce the existing port facilities will be free. They can easily be converted to cruise terminals.”

And as people’s leisure time increases, there will be more demand for sport shipping, he will add.

Mr Mehrotra will say the generally weak market conditions after the 2008 financial crisis were signals of prolonged weakness that many didn’t realise until recently.

“Until recently we looked at world GDP growth and its volume growth to find our clue for future growth in shipping and spent hundreds of millions in this belief,” he will say.

“We were living in our own cocoon without looking at the outside world and how it is changing around us.

“It is only in 2016 we started looking at the outside world to see if some other answers were there.”