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Amid pressure from NGOs and governments, shipping could be moving towards net zero by 2050, instead of the initial goal set of a 50% emission reduction. In its latest weekly report, shipbroker Gibson said that “last Friday saw the close of the much-anticipated Marine Environmental Protection Committee (MEPC 78) meeting at the IMO. The main focus was to progress IMO policy to build an effective greenhouse gas emissions (GHG) reduction strategy to be approved at MEPC 80 in 2023. Whilst the meeting was never intended to be a decision-making event, it did signal that sufficient momentum and support exists among most member states for the IMO to begin setting more ambitious targets and policy that will be centre stage at upcoming IMO meetings. However, environmental and industry groups have been critical of the MEPC for failing to achieve unanimous support amongst all members. They highlight the relative pace of decarbonisation proposed by the IMO and the ability of shipping to remain aligned to the 1.5C target agreed in the Paris Climate Agreement. This will only add to the pressure of subsequent IMO meetings to secure a plan for achieving adequate decarbonisation whilst ensuring an equitable transition process that can achieve broad member state support”.

According to Gibson, “in terms of what was achieved, two points stand out. Firstly, there appears to be support for achieving zero carbon emissions by 2050 instead of just a 50% reduction in emissions. The technical guides for EEXI, CII and SEEMP regulations have been finalised and adopted for future implementation. This will be crucial for setting the trajectory of industry emissions out to 2050. Several environmental groups are advocating bringing forward the trajectory for achieving net zero emissions by 2040 and halving emissions by 2030; although this does not seem to be on the IMO’s agenda at present given the challenges of achieving such reductions and the lack of support from some member states. Therefore, it appears these measures will be approved at MEPC 80 where lifecycle emissions guidelines are also likely to be agreed”.

The shipbroker added that “secondly, the proposal to establish a Sulphur Emission Control Area (SECA) in the Mediterranean Sea was approved for adoption at MEPC 79 in December 2022. This would require the use of bunker fuel with a sulphur content no greater than 0.1% such as low sulphur MGO or a scrubber system for vessels trading in or passing through the Mediterranean. If there are no delays, the Mediterranean SECA could be implemented as early as 2025. It is also worth noting that the likely inclusion of shipping into the EU ETS from 2023 will add an extra layer of complexity and cost on top of already highly elevated bunker prices”.

Gibson also noted that “another notable aspect of MEPC 78 was the rejection of a proposal by the International Chamber of Shipping (ICS) for a $5bn decarbonisation research and development fund that would have provided a market-based approach to reducing shipping’s carbon emissions. The plan focused on a mandatory levy of $2/tonne on bunker fuel that would have financed zero emission technology and had the backing of most major shipping bodies. This would have helped facilitate the application of new technologies at scale, although its rejection signals a reluctance by the IMO to be responsible for managing and supervising such a scheme. Any future proposed market solutions will likely have to be operated at the industry level instead of seeking official approval and implementation at the IMO if such proposals are to have any role in decarbonising shipping”.

“As the market looks ahead to MEPC 79-80, many will now be finalising their plans to achieve compliance with the proposed IMO regulations, especially in terms of CII and EEXI. MEPC 78 gives owners an indication that the IMO is now more committed to reducing the industry carbon emissions to net zero by 2050 and are unlikely to be watered down by some member states, given the broad support that exists both inside and outside shipping for concrete action”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Amid the gloom of spiralling energy costs, inflation, war, and the recent United Nations IPCC report which revealed that global carbon emissions are still rising, and governments are not following through on COP 26 assurances, shipping’s own endeavours to cut carbon emissions are in sharp focus. Congested ports, broken supply chains, and Covid-related hold-ups more generally, compound the concerns.

Yet the customers of many container lines – large and small – tell a different story. They can’t wait to speed up shipping’s decarbonisation journey and, what’s more, they say “We’ll pay for it!” Many are already engaged in a series of pilot projects. Others have set up new lobby groups, such as coZEV – Cargo Owners for Zero Emission Vessels – to further the cause by aggregating demand.

Singapore is the latest signatory to the Clydebank Declaration, agreed at COP 26, to which 23 countries have now pledged their commitment. The Clydebank Declaration aims to establish six green corridors where trailblazing shippers, carriers and fuel providers cooperate to cut emissions and try out new sources of ship energy. I see these six green corridors multiplying fast in the months ahead.

At LR, we believe that having the right metrics to measure is an essential component of the fuel transition process. So we’ve built a model – First Movers Framework – designed to assess all of the variables in the equation – well-to-wake emissions, fuel production, supply, transport and infrastructure, safety, regulation, technology readiness, financial implications, and societal response.

Putting this model into practice, we have also launched a new project in Asia – the Silk Alliance – based on container trade between Singapore and Hong Kong. It’s a fine example of the collaboration that is essential in the fuel transition process.

Our partners include MSC, Wärtsilä, Wan Hai Express Feeders, PIL, Keppel Offshore & Marine, Asian Development Bank etc. We expect other stakeholders to become involved – perhaps including one or more signatories to the Poseidon Principles initiative which now accounts for about 50% of global ship finance lending.

To me, two aspects of the Silk Alliance stand out. One, it’s not open-ended. It’s a 12-month project building on our First Movers Framework and a completed pilot study. And two, it’s not limited to new ships and fuels which are not yet available, we can address the challenge of retrofits and decarbonising existing vessels.

I believe that the container sector should be the primary focus for several reasons. In terms of monetary value, the world’s container trades are estimated to account for about 60% of global seaborne trade. Not only do carriers operate ships on specified routes with fixed schedules, but they also carry cargoes for many different customers.

No single shipper, therefore, bears the brunt of dramatically higher fuel costs. Analysts often use trainers as an example. A 20-foot container has capacity for about 3,000 boxes of trainers. For every additional $100 of freight charged for the box to cover more expensive fuel, that’s three cents per pair. Admittedly, most white goods are larger and take more space. But extra fuel costs would still mean only a few extra dollars.

It is logical to start small, with the Silk Alliance and green corridor projects. But these initiatives will spill over to other routes in other regions, and we can scale up fast. The world’s largest liner trade between Asia and Europe offers the most impact potential of any single route, for which the intra-Asia focus of the Silk Alliance provides a good foundation!

We must also manage the enthusiasm of shippers. They may wish to commit their products to ships running on zero-carbon ammonia, for example, but the technology does not yet exist. The first ammonia internal combustion engine is under development and not expected until late 2024 or 2025.

Having shipping’s customers onside is very encouraging, but the testing and assurance of new fuel technologies is essential and cannot be rushed. However, if such fuels were now available, shippers would be seeking RFPs – Request for Proposals – and committing significant volumes of cargo on five- or ten-year deals. That would, in turn, enable shipowners to consider switching to sustainable marine fuel, in the knowledge of a reliable payback.

But we must be realistic. Let’s not forget the regulatory process. Scrutiny of and compliance with competition rules, and approvals from the authorities that oversee them, can take a long time. The liner sector is no stranger to regulatory probes into its business models.

Yet, despite these challenges, I am optimistic. In the container business, the collaboration that is necessary to meet shipping’s unprecedented challenge is now even stronger than it was because we have many of our leading customers onside.
Source: Lloyd’s Register

The maritime industry must navigate a challenging course through digital transformation in pursuit of smarter, safer, more efficient and sustainable shipping. And, like any other journey, a detailed roadmap is needed to reach the destination. DNV has supported Grieg Star in developing such a map to achieve the goal of data-driven ship management.

We see digital transformation as a vital enabler to realizing our strategic vision of green and smart world-class ship operations that are aligned with decarbonization requirements and optimized for efficiency,” says Grieg Star managing director Atle Sommer.

Grieg Star is the ship management unit of Norway’s Grieg Maritime Group and runs a fleet of 30 open-hatch vessels. All of these are a part of the G2 Ocean pool, a joint venture between Grieg Maritime Group and Gearbulk operating a fleet of close to 100 such vessels.

The company has already made big strides on its digital journey, having merged its IT division with that of Gearbulk and G2 Ocean in 2019 to accelerate the transformation process in ship management within different departments across Grieg Star and Gearbulk.

Guiding the way for smart shipping
Sommer believes the smart ship of the future will have a high level of automation enabled by digital technology with gradually increased autonomy. At the same time, Grieg Star envisages that digitalization will be an enabler for carbon-neutral fleet operations by 2050, near-100% vessel uptime and significant operating cost reductions.
“We will not be able to deliver world-class operations in five to ten years’ time unless we fully embark on the journey towards smart shipping. There is no way around it. The push for green and smart operations goes hand in hand. Green will change the technology, while smart/digital will fundamentally change the way we work. In that respect, digitalization will possibly have an even greater impact than decarbonization,” Sommer says.

Loading an open-hatch vessel: G2 Ocean, a joint venture between Grieg Maritime Group and Gearbulk, operates a fleet of close to 100 such ships.

Digitalization holds high savings potential
As well as the need for decarbonization, the trend towards increasingly digitalized systems is being driven by the potential for significant cost savings from emerging technologies such as an onboard internet of things using data sensors, artificial intelligence, big data and machine learning, as well as expanding cloud connectivity with wider satellite coverage and falling costs for such technologies. The COVID-19 pandemic confirmed the potential benefits for the shipping industry of digital tools for remote ways of working in areas such as crew training.

DNV’s Discipline Leader in Digital Transformation, Jan van Tiggelen, who has been working with Grieg Star on its transformation project, says: “The ability to process real-time data to gain actionable insights into operations enables more reliable decision-making to make business processes more efficient, as well as enhanced monitoring, control, quality assurance and verification. The instant availability of such data also provides transparency for improved safety and greatly eases the process of compliance reporting in regard to ESG requirements.”

Digital investment is “low-hanging fruit”
Industry studies have shown that around 15% of decarbonization gains required to meet the IMO goal to halve greenhouse gas (GHG) emissions by 2050 will come from operational efficiencies on existing ships. Data-driven measures such as energy efficiency, fuel consumption monitoring, condition monitoring for preventive maintenance, optimized weather routing and vessel performance management can contribute both to reduced emissions and operational economies. For example, a 1% saving on an annual fuel bill of $500 m for a 100-vessel fleet would amount to a $5 m saving per year.

“Optimized energy efficiency and operations through digitalization are low-hanging fruits with lower investments compared to alternative fuels and conversions. These can help the shipowner to keep the vessel GHG compliant while awaiting more mature alternative fuel technologies,” according to DNV’s Advisory department Head of Safety Øystein Goksøyr.

But, given the clear benefits in terms of environmental gains, lower costs and improved safety, why are only a few shipping companies like Grieg Star embracing the digital shift?

DNV supports industry to leverage digitalization
Goksøyr explains: “The somewhat conservative and traditional mindset of the shipping industry has slowed progress on digitalization relative to other sectors such as aviation and automotive. Digital transformation entails an overhaul of business processes and products to fully leverage the opportunities of data-driven solutions. This results in organizational changes and new ways of working, which can make it difficult to implement. In addition, there is a strong focus on 24/7 fleet operations with minimal disruption that constrains a company’s ability to transform.”

DNV has now established a digital transformation section to support the industry shift, predicated on its smart vessel class and cyber security notations for data infrastructure related to operations, maintenance and energy efficiency, as well as services such as remote surveys and electronic certificates accessible via its Veracity platform. These cover the four main areas of transformation – strategy, smart fleet transformation, management implementation and smart vessel operations.

Leadership from the top needed for transformation
Goksøyr believes active leadership, support and involvement from management to promote a collective understanding of the benefits and consequences from implementation of digital initiatives is an essential starting point for the digitalization journey. “At the same time, it is necessary to have a clear vision and long-term strategic goals to determine where you are on your journey, where you want to go and how to get there,” Goksøyr says.

Establishing strategic goals, determining the status of digital projects, setting priorities: DNV has supported Grieg Star’s development of a digital transformation roadmap towards 2040.

Digital transformation roadmap supports finding the right strategy
In the case of Grieg Star, DNV has helped to develop a digital transformation roadmap towards 2040 that has entailed establishing strategic goals, then determining the current status in areas such as smart maintenance, energy management and safety, and assessing the gap between where things are at now and the company’s long-term ambition. The roadmap is then used to plot the way forward by identifying action areas and a timeline for the application of digital solutions, including remote inspections, energy management, automated MRV and DCS reporting for the EU and IMO, respectively, and predictive maintenance.

Our aim has been to revisit our long-term objectives, establish the status of ongoing digital initiatives, make priorities, and ensure we are on the right track and that everything we do takes us in the same direction. With DNV’s wider industry insight, we have gained a precise overview of our current status and are more on the same page internally. We now have a roadmap to give us a clear sense of direction that means we can start walking and step-by-step realize the potential of digitalization,” Sommer emphasizes.

Data-driven ship management enables centralization
According to van Tiggelen, DNV and Grieg Star have together identified use cases for pilot projects that can be tested and implemented at low cost, such as a KPI dashboard tool for centralized performance and drydocking application, in addition to ongoing digitalization initiatives including upgrades to existing systems and replacement of legacy software. Centralization of fleet operations is one of the main strategic goals of Grieg Star, along with emissions and cost reductions, and is seen as a key element in the shift to data-driven ship management.

Grieg Star envisages that in future automated real-time data from smart ships will facilitate fleet management based on data analysis for performance benchmarking by constantly tracking all vessels over time. This enables optimized fleet-wide decision-making, leading to improvements in cost, efficiency and safety. For example, such a solution will be able to see whether a ship is running multiple auxiliary engines at low load, leading to increased fuel use and running hours, and can give corrective guidance to save emissions and maintenance costs.

Holistic approach with humans onboard for change
G2 Ocean’s Vice President for IT, Kristin Andersen, points out the initial initiatives at Grieg Star have been focused on replacing legacy software, creating new integrated digital infrastructure and moving from dashboards to analytics. “You need to walk before you can run. There is a stairway to heaven for autonomous vessels and we need to do a lot to get there. The right technology has to be in place for when such ships are ready,” she says.

Andersen says mature technology for remote control of ship operations is already available but “can only be implemented effectively based on a holistic approach together with processes and people”. She highlights the importance of the human element in the transformation process so that crew onboard vessels are not burdened with a higher digital workload in addition to manual tasks, but rather that administrative tasks such as compliance reporting are automated and transferred to shore so ship personnel can work more effectively in their assigned roles.

“The biggest challenge in changing ways of working is not the technology but the human element. Change management is necessary to ensure employees are onboard the transformation process and to develop a common sense of ownership. Having a roadmap enables us to carry out that process in a stepwise manner – and this makes the journey to smart shipping more interesting for everyone,” Sommer concludes.
Source: DNV, https://www.dnv.com/expert-story/maritime-impact/Enabling-transformation-DNV-supports-Grieg-Star-with-digital-roadmap-for-the-future.html?utm_campaign=Ind_Bulk_406_Digital%20Transformation%20and%20smart%20shipping&utm_medium=email&utm_source=Eloqua

SINGAPORE, June 16 (Reuters) – Global port congestion is set to continue until at least early 2023 and keep spot freight rates elevated, logistics executives said on Wednesday, urging charterers to switch to long-term contracts to manage shipping costs.

The COVID-19 outbreak has lengthened ship delivery times since 2020, pushing up freight costs, while the Russia-Ukraine conflict and lockdowns in Shanghai have added to supply chain disruptions this year.

“We believe the current congestions, not only the ports but also the landside infrastructure, will be there at least till Q1 2023,” said Peter Sundara, head of global ocean freight product for the global logistics division at Visy Industries.

While more vessels could be added to the global fleet next year, this does not mean that freight rates will drop broadly as it depends on how ship carriers allocate increased vessel capacities, he told the S&P Global Platts Bunker and Shipping Summit.

Eric Jin, head of investment support at industrial equipment supplier BMT Asia Pacific, said rising shipping costs, longer transit times and higher uncertainty will be the “new normal” for the shipping industry.

Spot chartering rates have held firm so far this year, with supply chain disruptions and port congestion affecting ships globally, particularly in the United States and China.

The executives recommended charterers sign longer-term contracts with shipowners to overcome issues of volatile cost and availability.

It’s “no longer a case of going for three months or six months, one month, not even one year, but two to three years … because we want certainty in cost and certainty in space,” said Sundara.

BMT’s Jin said more than 60% or 65% of shippers were remaining on spot rates.

“This means they are not taking measures to deal with the new situation, this means they are prone to full supply chain risks,” he added.

The usual mix of progress and stalled initiatives occupied the IMO’s Marine Environment Protection Committee convened earlier this month, setting the context for frantic discussions ahead of next year’s key meeting.

The monumental task of driving global consensus on reducing shipping emissions crawled forward ever so slightly at MEPC 78 this month. That may have made it frustrating for observers, but the meeting was successful in laying out a clear agenda for what needs to be achieved by MEPC 80 – the deadline for IMO to review and hopefully upgrade its 2050 and intermediate targets.

Given the time constraints of the virtual meetings, several proposals were deferred until the next MEPC, to be held in December. MEPC 78 focused on three key discussions around greenhouse gas emissions:

Proposals related to revision of the Initial IMO GHG Strategy, which is scheduled to be adopted at next year’s June MEPC meeting;
The outcomes of the intersessional working group meetings on GHG;
Proposals for mid-term GHG reduction measures and the International Maritime Research and Development Board;

Revising the IMO GHG strategy

The discussions at MEPC focused on revising the level of ambition in GHG emissions reductions while ensuring an equitable transition that does not unfairly burden developing states and small island countries.

While some countries argued for a higher 2050 target of reducing GHG emissions from shipping by 100%, others argued against, saying that IMO had the responsibility of taking a realistic and pragmatic approach. Other phased targets were considered, ranging from upgrading the 2030 ambition to introducing five-year targets.

With no chance of consensus in the current meeting, the formation of three new intersessional working group meetings was agreed; one to be held before MEPC 79 in December and a further two before MEPC 80 in mid-2023.

Outcomes of intersessional working groups

The intersessional groups before MEPC 78 had considered draft guidelines focused on the upcoming short-term measures to be introduced from November 2022 – the Energy Efficiency Existing Ship Index (EEXI), the annual operational carbon intensity indicator (CII) rating and an enhanced Ship Energy Efficiency Management Plan (SEEMP).

The MEPC adopted a series of guidelines to support the implementation of these measures as well as approving draft amendments to appendix IX of MARPOL Annex VI on the reporting of EEXI and CII values to the IMO Data Collection System (DCS). The committee also agreed to include a new workstream on further revision of the IMO DCS in the agenda of the next working group.

An earlier intersessional meeting had focused on the debate around lifecycle assessment of marine fuels – seen as a critical step in ensuring that maritime emission regulations do not simply transfer emissions from sea to land. Guidelines on lifecycle GHG/carbon intensity for marine fuels (LCA guidelines) had been drafted, and MEPC 78 established a separate correspondence group to further the work.

The correspondence group will submit an interim report to MEPC 79, and final draft guidelines to be adopted by MEPC 80. The guidelines will allow for a Well-to-Wake calculation, including Well-to-Tank and Tank-to-Wake emission factors, of total GHG emissions related to the production and use of alternative marine fuels.

Arguably the biggest decision at MEPC 78 was on the long-debated International Maritime Research and Development Board, which proposed an innovation fund supported by a US$2 per tonne fuel levy. Much of the previous discussion had centered on how to ensure that the measure adequately supports the transitions of developing countries and those particularly exposed to the impacts of climate change.

Despite an updated proposal that would have added US$50 million to IMO’s technical capacity building programme – a near tenfold increase in funding for that project – no consensus was agreed. Instead the suggestion has been kept on the table to be considered among mid-term measures.

The committee noted the progress made by the intersessional working group in advancing towards the developing mid-term measures integrating various technical and carbon pricing elements. It noted the need for additional information on the proposed mid-term measures and encouraged proponents of measures to work together between MEPC meetings with a view to combining elements from proposals into a basket of measures.

The frustration of the IMRB proponents was evident – primarily through a frank statement released by the International Chamber of Shipping after the decision to include it under discussion as a mid-term measure rather than accept it as a short-term measure.

“By refusing to take forward the shipping industry’s proposed research and development fund, the IMO has wasted its opportunity to kick start a rapid transition to zero-carbon technologies which will be vital if we are to decarbonise completely by 2050,” said Guy Platten, Secretary General, International Chamber of Shipping.

“Despite the support of many IMO states, we have been frustrated by short-sighted political manoeuvring which has led to the proposal in effect being killed. The signal this sends means that the financial risk associated with green investment will remain high, slowing down efforts to switch to zero-carbon fuels as soon as possible.”

What’s next?

If progress seemed frustratingly slow at MEPC 78, there were some important outcomes. The reinforcement of MEPC 80 next year as the deadline for a revision of the GHG ambition will focus minds on that date, although the wide range of opinions indicates consensus will not be easy.

The allocation of more time to discussion on mid-term reduction measures between MEPC meetings will be welcomed by some and resented by others who are already concerned about the time and resources being poured into GHG discussions. But no one denies the work is crucial and the shortened virtual MEPC meetings mean more time for discussion is needed.

The EEXI and CII will enter force supported by a range of guidance and with a pledge to review how well they work by 2026. Time will tell how these affect the pace of shipping’s decarbonisation, especially with little focus on how the regulations will be enforced.

The next intersessional working group is provisionally scheduled to meet early December and has been set a clear roadmap in the terms of reference laid out at MEPC 78. It will aim to complete a circular on the Procedure for assessing impacts on States of candidate measures as well as consider mid-term measures and the revision of the IMO’s Initial GHG Strategy. It will also be charged with looking at incorporating lifecycle assessment of marine fuels into any measures.

A lot now rests with the intersessional working group. Progress there will determine the success of MEPC 80 in advancing the ambition of shipping’s emissions reduction, and deciding the mid-term steps it will

SEOUL, South Korea, June 20, 2022 /PRNewswire/ — With COVID-19 infection rates easing, there is a wind of positivity blowing through the global MICE industry. It has once again become a hive of activity, with previously canceled events put back on the calendar and expected to bring in visitors old and new from all over. The Korean city of Busan is no exception, going all-in with its MICE hosting activities for new events. For Busan, the month of May was particularly eventful with its official selection as the host city of the WADA 2025 World Conference on Doping in Sport.

On May 19, the WADA Executive Committee, with its 38 members from 11 countries, convened in Cairo, Egypt, where it chose Busan over Tampere, Finland and Athens, Greece to host the WADA 2025 World Conference. The Korea Tourism Organization and Korea Anti-Doping Agency appeared before the WADA Executive Committee in Cairo on May 13 to convince them that Busan was the best choice. The Korean officials networked with members of the WADA Executive Committee, developing rapport and individually informing them of the MICE prowess of Busan. Contrary to expectations of a close vote the outcome proved to be a decisive win for Busan, the first Asian city to enjoy the honor. The victory gives Busan a ranking of 12th in the world and 4th in the Asia-Pacific region in terms of achievements in hosting of global conferences, as analyzed by the Union of International Associations, a non-profit research and documentation body. The selection of Busan to host such a prominent global MICE event as the WADA World Conference is expected to tremendously improve its chances of being chosen to host the World Expo 2030.

As the unofficial maritime capital of Korea, Busan has a thriving maritime industry, with a concentration of businesses and infrastructure in fishing, shipping, shipbuilding, and maritime leisure. In view of such strengths, the 2022 Busan Maritime MICE Workshop was held from May 26 to 27, the first event of its kind to be held by the Busan Tourism Organization, to bring to the forefront the companies and other entities at the core of Busan’s maritime industry.

To shed light on Busan as a global maritime MICE hub, around 60 representatives of maritime and fishing authorities, academic societies, and MICE businesses were invited to the workshop involving presentations on Busan’s MICE infrastructure and incentives. Afterwards, the attendees took a field trip to the Busan Port International Exhibition & Convention Center, the new luxury hotel Signiel Busan, and the unique venues BUSAN X the SKY and F1963, all assets in Busan’s future MICE hosting endeavors. Included in the field trip was a yacht tour, which left attendees in awe over the beauty of Busan’s waters in the month of May.

Busan Metropolitan City will be utilizing avenues such as expos and roadshows to showcase Busan’s merits and beauty as an ideal bleisure city to MICE officials from around the world and enhance its position as a top global MICE destination.

Source: Busan Tourism Organization

Working with like-minded is fine, but working open-mindedly is more important. The Quad’s attempt to promote Maritime Domain Awareness and reduce illegal, unreported and unregulated (IUU) fishing in the Indo-Pacific region should involve an inclusive conversation with China.

Perhaps the most substantial development of the third Quad Leaders’ Summit in Tokyo on 24 May was the launch of the maritime security initiative, the Indo-Pacific Partnership for Maritime Domain Awareness (IPMDA). In the eyes of the Quad nations, this collaboration can craft a public good that serves their shared interests and benefit smaller states in the Indo-Pacific region in the security and environmental domains. However, China tends to believe that the IPMDA is created to target itself exclusively, viewing the initiative as an avatar of “small cliques” politics. That is, certain countries are intentionally grouped to produce a shared sense of “selfness” to disconnect and alienate the third parties (the otherness).

One of the key objectives of the IPMDA is to keep track of suspicious vessels that turn off their tracking transponders for conducting illicit activities. To achieve this, the Quad will use an Automatic Identification System and radio-frequency technologies to collect commercially-available data that can be provided to potential partners. Four existing information fusion centres will be integrated and extended, which are located in India, Singapore, the Solomon Islands, and Vanuatu. Though unstated, the main target of this initiative appears to be China, which America has accused of being the largest exploiter of global fishing that is responsible for 95 percent of IUU fishing in the Indo-Pacific region.

The Chinese Response

Unsurprisingly, this allegation was quickly rebutted by both Chinese government and academics. In the Regular Press Conference, Chinese Foreign Ministry Spokesperson Wang Wenbin responded that China “actively upholds the UN-centred international system” and abides by “relevant international law”. Chinese academics contend that the US is using disinformation to delegitimise China’s maritime actions in the Indo-Pacific region.

China’s reactions can be understood in two aspects: one emotional and one rational. From an emotional perspective, either the state or society in China shows an aversion toward “small cliques” politics, which they think might generate an unjust binary image between the West and China. This division endows the West with a sense of superiority but exclusively categorises China as an inferior position. This dichotomy is mutually dangerous because the West may misjudge China based on who it is rather than what it did, and China may dismiss constructive criticisms from the West.

From a practical viewpoint, China worries about two real-world impacts resulting from the IPMDA. First, framing China as a threat further stains China’s international reputation, which can negatively shape how others view and behave toward China. Second, the data-sharing mechanism that the IPMDA enables has security concerns. Though at this stage, only commercial data will be shared, this mechanism is technically applicable in the political and military arena. This has the potential to undermine China’s strategic interests, particularly regarding China’s maritime militia issue.

Although the US’s accusations and China’s rebuttals both encompass a certain degree of politicised rhetoric, the statistics present that China has a poor performance in fishing activities. A report by the Congressional Research Service indicated that according to the Global Initiative Against Transnational Crime, a non-government organisation, China was identified as the worst-scoring coastal country in IUU fishing. However, a media analysis project conducted by the Food and Agriculture Organization (FAO) showed that China’s performance might not be the most notorious: among 329 verified media-reported illegal-fishing incidents in the Asian Pacific region from 1 January 2015 until 15 August 2019, persons of Chinese nationality were only involved in 19 cases, ranking fourth in the region.

The Rationale of Chinese Participation

Undeniably, China has the world’s largest fishing fleet, and so it might logically follow that they are responsible for a substantial portion of IUU fishing. However, China’s substantial maritime presence also makes them a key actor in combatting IUU fishing. China is likely to join not because it is benign or moral, but because of a demand for modernisation and a desire to improve its international image. In reality, Beijing has taken concrete steps to combat IUU fishing, such as reducing government subsidies, mandating the installation of vessel monitoring systems, providing crew and skippers’ training, and imposing fishing bans. These practices, as the FAO reported, have apparently reduced China’s catches and fishing vessels and generated a global impact. But there are problems around under-reporting and regional disputes over some Chinese measures, which require multilateral negotiations.

China has no reason to refuse a neutral invitation to jointly resolve IUU fishing, even if it comes from the Quad. “If the IPMDA is a public good, why does it exclusively target China? ” said Hu Bo, Professor for Maritime Strategy Studies at Peking University and Director of the South China Sea Strategic Situation Probing Initiative. Indeed, working with like-minded states is normal, but tackling international problems and promoting global peace requires leaping out of the comfort zone to work open-mindedly and creatively.

If the Quad creates a public good that contributes to regional polarisation, smaller powers are unlikely to actively engage because hedging between great powers is safer for them to survive. This is evident in the case of the Solomon Islands, which has one of the data fusion centres under the IPMDA initiative but also signed a security pact with China. With an open mindset, Solomon Islands can be the middle ground to strike a dialogue between the Quad and China. From a normative lens, the Quad is wiser to facilitate conversation rather than intensify confrontation. A conversation is an antidote to preconceived ideas and can coexist with competition.

Rebecca (Yancheng) Zhang is a fourth-year student at the University of Sydney majoring in International Relations and Education. She is currently undertaking an honours year writing her thesis on potential cross-strait conflict. Rebecca is a research assistant at Intellisia Institute where she writes a series of reports and commentaries on AI politics, data governance, Taiwan politics, and US-China relations. She is also a member of the CISS Youth project at the Centre for International Security and Strategy, Tsinghua University. Her research interests revolve around Taiwan politics, political theory, war and justice and AI and politics as well as Indo-Pacific geopolitics.
Rebecca is an intern with the Australian Institute of International Affairs NSW.

Responding to media reports, Global Ports has confirmed it has been approached by MSC with a potential cash offer for all shares of the cruise ports operator.

By Tommaso Ebhardt and Ercan Ersoy (Bloomberg) —

MSC Mediterranean Shipping Co. SA is considering taking a controlling stake in the world’s largest cruise port operator, Global Ports Holding Plc, according to people familiar with the matter.

The maritime container group has been holding exploratory talks over a deal for Global Ports, owned by Turkish businessman Mehmet Kutman, the people said, asking not to be identified discussing confidential information.

Shares in London-listed Global Ports have fallen around a third in the last 12 months, giving it a market value of £53 million ($63 million). The company may look to pay down its debt pile, which stood at $435 million net at the end of March, after any deal with MSC, the people said.

Global Ports operates 26 cruise ports in 14 countries and has been recovering from the impact of Covid-19 pandemic travel restrictions. It returned to profit in the 12 months ended March 31.

Deliberations are ongoing and there’s no certainty they’ll result in an offer from MSC, according to the people. Representatives for Global Ports and Kutman’s Global Yatirim Holding AS declined to comment, while a spokesperson for MSC couldn’t immediately be reached for comment.

Geneva-based MSC, owned by Italian billionaire Gianluigi Aponte, has been on an spending spree on the back of booming cargo demand during the pandemic. In April, it agreed to acquire African transport and logistics business of Bollore SA for 5.7 billion euros ($6 billion). It’s also planning to take a stake in ailing Italian ferry operator Moby SpA and bid with Deutsche Lufthansa AG to buy ITA Airways, the successor to failed carrier Alitalia.

–With assistance from Luca Casiraghi.

The Port of Savannah, the second-busiest port on the East Coast, recorded an all-time cargo record in May as strong consumer demand and shifting inbound trade continued to drive record productivity at the port.

The Georgia Ports Authority reported Wednesday that Savannah moved an all-time high 519,390 TEU in May, breaking the previous record of 504,350 TEUs set in October 2021. May volumes grew by 8.5 percent, or 40,770 TEUs, compared to the same month last year.

“Despite global supply chain challenges, the Port of Savannah continues to be an economic driver, providing reliable, world-class service for port customers across our state and nation,” said Georgia Gov. Brian Kemp.

GPA Executive Director Griff Lynch noted Garden City Terminal is handling more business during the current influx of trade than during the previous spike experienced last fall. The additional trade is driven in part by vessels diverting to Savannah from other East and West Coast ports, the GPA said.

“Strong consumer demand continues to drive higher volumes at the Port of Savannah,” Lynch said. “The infrastructure improvements and pop-up yards approved by the GPA Board have enabled our operations to maintain the flow of cargo across our terminal, despite unprecedented container volumes passing through the port.”

May’s cargo numbers follow the port’s third busiest month on record in April, when it handled just shy of 500,000 TEUs. Unfortunately, these higher volumes have caused the backup of ships waiting at the port’s anchorages to swell in recent weeks. The Georgia Ports Authority website showed 26 containerships waiting at anchor as of this morning, up from around just 3 ships waiting as of mid-May and approaching the levels experienced during peak congestion last Fall. Savannah also dodged a bullet this week after a large containership ran aground—and was later freed—on the Savannah River.

May’s cargo volumes highlight challenges the Biden Administration faces in reducing congestion and backlogs at ports that have pushed shipping freight rates higher throughout the pandemic, raising costs for American consumers and contributing to inflation. The recently-passed Ocean Shipping Reform Act, which gives the Federal Maritime Commission greater authority to regulate foreign ocean carriers’ practices and promote exports, is unlikely to help much as cargo volumes continue to exceed port capacity.

That’s not to say the Georgia Ports Authority has not making an effort. The GPA website says the Port of Savannah is the “single largest and fastest-growing container terminal in America.” In 2021, the port blew past the 5 million TEU mark (5.6 million TEU) for the first time in its history, handling about 20% more containers than it did in 2020. After last year’s record, Georgia Gov. Brian Kemp called the port “an example to the nation in solving the supply chain crisis” for its efforts to reduce congestion by adding capacity by undertaking short and long-term projects and initiatives to tackle congestion, such as using “pop-up” container yards.

As of April, the port authority has added 900,000 TEUs of annual capacity to the Garden City Terminal, and another 300,000 are expected to come online in July for a new total of more than 7 million TEUs of container handling space.

Phase I of the Garden City Terminal West expansion has added a 25-acre container yard adjacent to the primary truck route approaching the main terminal. Phase II will add up to 1 million TEUs of annual capacity, which will begin coming online in 2023.

“By increasing container space at Garden City Terminal, GPA is accommodating the expansion in global commerce that supports job growth in Georgia,” said GPA Board Chairman Joel Wooten. “Industries from logistics to auto manufacturing, and agriculture to retail depend on Georgia’s ports for reliable supply chain solutions.”

The Port of Savannah completed 327,400 truck gate moves in May, counting loaded import and export containers, as well as the movement of empty chassis. Thanks in part to expanded night gate hours, the Garden City Terminal facilitated more than 15,000 truck moves between the hours of 7 and 11 p.m. last month, up from just over 10,000 in April. Another 48,000 containers (approximately 88,000 TEUs) moved by rail in May.

In addition to the container trade, GPA achieved a 28 percent increase in breakbulk cargo for the month. Breakbulk commodities including iron and steel, rubber, and forest products reached 320,722 tons in May, up 70,780 tons.

By Augusta Saraiva (Bloomberg) Employers and the union representing more than 22,000 dockworkers at 30 US ports on the West Coast are unlikely to reach a wage deal by the time the current contract expires next month but neither side foresees disruptions that would hobble supply chains.

“Neither party is preparing for a strike or a lockout,” the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents more than 70 terminal operators and ocean carriers, said in a joint statement Tuesday.

A collapse of the negotiations would risk a work stoppage during the busiest time of year at the nation’s largest ports of Los Angeles and Long Beach, one that would snarl US supply chains still suffering pandemic disruptions.

The sides’ commitment to keeping cargo moving throughout the process would avoid a repeat of the delays and congestion that hampered ports from San Diego to Bellingham, Washington during the 2014 talks that extended into 2015.

The labor talks take place as the US recovers from an unprecedented supply-chain crisis sparked by the Covid-19 pandemic. At stake in the negotiations is no less than the recovery of the world’s biggest economy, already dealing with the most pernicious inflation in four decades, shortages of products ranging from baby formula to air-conditioner parts, and growing fears that another shock could tilt the country into a recession.

The current collective bargaining agreement expires at 5 p.m. on July 1, the parties said. Talks for a new agreement began May 10 in San Francisco and will continue until an accord is reached.

Officials from the ILWU and PMA met with President Joe Biden during his visit to the port of Los Angeles Friday, discussing issues “including supply-chain congestion and their shared commitment to reach a collective bargaining agreement that is fair to both parties,” they said.

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