Massive macro implications of Covid-19 for shipping: Dryad

Dryad Global has said that Covid-19 will be “the defining threat trend of the year”, and that it will shape commercial and security trends within shipping, both this year and in the future.

Dryad said it was key that vessels, vessel owners and the maritime community relied on “clear-headed, data-driven and reliable solutions”, which would facilitate economic activity within this new reality.

Emerging Threats: Piracy & Maritime Crime

West Africa remained particularly vulnerable to rises in piracy, partly driven by a lack of effective mitigation strategies, and co-ordinated security responses to piracy and  maritime crime remain embryonic across the region. Should Covid-19 spread throughout sub-Saharan Africa, overwhelming healthcare systems and becoming most states main priority – a scenario which Dryad saw as likely – efforts to mitigate regional maritime crime in West Africa would probably be neglected. Therefore it was unlikely there would be a decrease in the number of piracy incidents. Indeed, a partial increase was “eminently possible”.

Dryad said that it currently assessed the likely impact of Covid-19 on piracy in the Indian Ocean as minimal. While there had been an increase in the number of reported incidents in the Gulf of Aden in 2020, none of these incidents had been confirmed as acts of piracy. The spread of Covid-19 throughout the key risk areas in the Indian Ocean was unlikely to alter events or the security picture to ay great degree in the short- to medium-term.

The economic impact of COVID-19 on areas such as the Gulf of Guinea, Gulf of Aden, Red Sea, Gulf of Oman and the Malacca Strait, where black market activity had been observed in the past were likely to see an increase in illicit maritime trading. “The scale of Covid-19 infection in global maritime crime hotspots will likely determine the degree to which current social economic problems are exacerbated by the crisis. Where there is evidence of longer-term economic impact then it is likely that there will be an increase in incidents”, said Dryad.

Emerging geopolitical threats

The spread of Covid-19 was likely to result in the recontextualization of the operational threat profile, said Dryad. With nation states focusing on their own internal affairs, it was likely that current geopolitical threats would fade for the time being. That did not mean that the overall threat to vessels and personnel would reduce or disappear.

Operational security could be negatively impacted by reductions in monitoring and enforcement capabilities, as organizations struggled to maintain deployment commitments. Dryad had a particular comment to make about Iran, concluding that “Were a stage reached where the viability of Iran as a state and the preservation of the regime was in question, the risks of localized but significant incidents could increase sharply”. However, as in the past, any action by Iran would likely be preceded by a plethora of indicators and warnings, underscoring the need for accurate reporting.

Libya is vulnerable to the spread of disease as the nation and its healthcare system has been weakened by the ongoing conflict, said Dryad, adding that “if Covid-19 significantly spreads in Libya, then it is likely a reduction in fighting would be seen as manpower on both sides is degraded”. However, any spread of the virus would likely result in little change in the fault lines of the conflict, as both sides would fall back to their centres of gravity.

Emerging threats: crime and internal stability

Fragile states with volatile domestic agendas were those most likely to suffer violence and disorder in the short-to-medium term as Covid-19 spreads. Theft, looting, and general disorder would likely be a feature of many states. The frequency of these was highly likely to be exacerbated by a scarcity of resources to maintain order, as governments become overwhelmed by issues such as pressures on health systems and surges in unemployment that have been seen to accompany the spread of the disease.

Emerging threats: migrants

As disorder and panic spreads, Dryad said that it was realistic to anticipate a rise in global migration from states which cannot sufficiently quarantine and lockdown infected regions. Libya, which has in recent years seen high levels of migration, was an area of concern. “With a breakdown in Libyan state administration a possible consequence of the pandemic, it is likely increasing numbers of potential migrants could feel they face improved odds in Europe. This in turn may increase the chances that vessels in the Mediterranean have to assist migrant vessels in distress, but would simultaneously raise the prospect of migrants who carry Covid-19 being a health concern to vessel crew”, said Dryad.

Conclusion

Dryad Global concluded that vessels which were security aware would still be able to trade, but to trade securely would require precise, real-time, data-driven solutions. The restrictions on travel that Covid-19 had placed on the deployment of PMSC’s would not in itself lead to an escalation of risk, but contextually this trend would inform the security profile faced.