DHL Global Forwarding has signed an agreement with Hapag-Lloyd for the use of advanced biofuels. As an initial step, Hapag-Lloyd will ship 18,000 TEU of DHL’s volume using advanced biofuels, which is equivalent to a reduction of 14,000 tons of Well-to-Wake CO2-emisisons.

The two companies share the vision of decarbonizing container shipping and logistics. With their project, they demonstrate the scalability of sustainable transport solutions and the relevance of sustainable fuels in today’s market. As pioneers, both DHL and Hapag-Lloyd are pledging for a uniform industry standard, following the insetting approach.

Dominique von Orelli, Global Head of Ocean Freight at DHL Global Forwarding, says: “The decarbonization of heavy transport is an important challenge that the entire industry needs to rethink. That is why we are very proud to have found a partner in Hapag-Lloyd that shares the same ambitions for a climate-neutral world as anchored in the Paris Agreement. Together we want to pave the way for Book & Claim and insetting mechanisms to make it easier for shippers to use sustainable fuels.”

Advanced biofuels are based on raw biological materials, such as used cooking oil and other waste products. This material is used to manufacture a fatty acid methyl ester (FAME), which is then mixed with varying proportions of low sulphur fuel oil. Compared to standard fuels, this pure biofuel product lowers greenhouse gas emissions by more than 80 percent.

Danny Smolders, Managing Director Global Sales at Hapag-Lloyd, says: “We are very happy to have signed this contract on using a considerable amount of advanced biofuel with DHL, as we both share the values and ambition to protect our environment and move towards a greener future.

“Biofuel will play a significant role in the upcoming years on our path to becoming net-zero carbon by 2045. This project will bring us a step closer to offering our customers biofuel-powered transportation as a commercial product and thereby to supporting them in their efforts to reduce their carbon footprint.”

Hapag-Lloyd has been testing advanced biofuels since 2020 and offers a carbon reduced transport solution utilizing biofuel blends instead of traditional fossil marine fuel oil (MFO). The resulting reduction in carbon dioxide equivalent (CO2e) emissions can be offered as a “Green Product” on a Twenty-Foot Equivalent Unit (TEU) basis and thereby transferred to customers in order to help reduce their Scope 3 emissions.

DHL’s GoGreen Plus service paves the way to transition to clean and sustainable transportation. As part of GoGreen Plus, DHL’s customers are offered various solutions for minimizing logistics-related emissions and other environmental impacts along the entire supply chain.

Therefore, CO2 emissions are reduced in both air and ocean freight, and additionally, the remaining part of the supply chain is made climate neutral by full lifecycle emission compensation. The emission reductions also help DHL’s customers to achieve their climate targets.

With the “Book & Claim” mechanism, DHL can pass on the benefits of lower greenhouse gas emissions (Scope 3 emissions) to its customers. The product offering GoGreen Plus is part of the Group’s mid-term sustainability roadmap for 2030 and contributes to the sub-target of having at least 30 percent of fuel requirements covered by sustainable fuels.

To reduce CO2 emissions in line with the Paris Climate Agreement, the Group will spend €7 billion in sustainable fuel and clean technologies by 2030.

Source: https://maritimefairtrade.org/hapag-lloyd-uses-advanced-biofuels-for-dhl-shipments/

The Covid-19 pandemic catalysed remote working, and with that, inadvertently spurred companies to adopt additional safety technologies. However, it remains to be seen whether companies will continue to recognise the value of improving workplace safety and embrace new technologies to do so.

During a discussion organised by Safetytech Accelerator, in partnership with The Financial Times, and presented at the Lloyd’s Register Foundation Safer World Conference, Emily Whitcomb, director of the Work to Zero initiative at US non-profit safety advocate National Safety Council (NSC), said that Covid-19 was a major disruptor for safety.

She said: “We were on the cusp of the next safety revolution. With Covid-19, companies had to look for other ways to control risks… how can you automate things so that humans are not having to gather? What we found was that when Covid-19 hit, a lot of companies were looking at the technologies they were using and they were able to pivot a little bit to help.

“We saw a lot of companies were able to quickly pivot technologies like proximity sensors, to be used for social distancing among their workers. With office workers able to use Zoom and the Internet to engage with each other, companies found that they were able to get experts to come onsite; they didn’t have to physically come in.”

Safetytech Accelerator managing director, Dr Maurizio Pilu, noted that while certain industries, such as shipping, are notoriously late in adopting new technologies, the pandemic had speeded up this process.

Dr Pilu said: “Covid-19 seemed to accelerate an existing trend. What we have seen in other sectors is that often there is no turning back, once people get the taste of it [new technologies].”

He believes that technologies, ranging from drones, to AI, computer vision and wearables, have become affordable, flexible and robust enough to be adopted.

Dr Pilu continued: “As we have seen in the past, technology has to be right to go over the adoption tipping point and I think it’s starting to look right in many, many ways.”

James Pomeroy, Global Health and Safety Leader and Director at UK engineering consultancy Arup Group, agreed that while the pandemic has facilitated remote working, current generations of workers are demanding better safety standards.

Pomeroy elaborated: “It’s a generational shift—they [workers] don’t want to sit through PowerPoints, they don’t want to sit through hours and hours of training, they want something that they can play with, something that’s in their pocket that’s easy to use, readily designed and is interesting.

“Safety is plateauing. In some countries, we have actually seen an increase in fatalities, and that includes work-related commuting. So, there is this tipping point that we are seeing, generations coming through, demanding better solutions. We need to look at catastrophic risk and sustainability as part of that. Companies are looking at safety as a reputational, financial, social and equitable issue that they need to think differently about.”

Anglo Eastern Ship Management’s Managing Director, Group QHSE and Training, Pradeep Chawla, said that this company tries to be one of the early adopters of new technologies, adding that his company is one of the few that uses various types of simulators to train seafarers.

Chawla said ,“We’ve adopted gaming as a technology for teaching, moving from single-user to multi-user games. With respect to injuries, as an industry, we have more or less, passed that stage of just riding procedures and checklists and most of the good companies in shipping are at a stage where they are dealing with behaviour-based safety, rather than process-based safety and checklists.
“When it comes to challenges in adopting safety technology, it’s like any other industry. People are people; there’re the early enthusiasts who will line up outside Apple showrooms to get the latest version of iPhone and they’re the granddads who don’t want to go beyond the Nokia interface. I think that what has changed is that the cost of technology is reduced… it’s a known fact that any early adopter of technology pays more than those who come in later.”
Source: Lloyd’s Register

The tanker market is experiencing a structural shift in trading routes, which could have long-standing implications for ship owners. In its latest weekly report, shipbroker Gibson said that “back in March we looked at commercial stock developments for both crude and products in the key trading hubs. Whilst the invasion had just begun and therefore not yet had any impact on inventory levels; stocks were already trending towards historic lows. Now, after 5 months of war and resurgent oil demand, stocks have come under further pressure and conceivably, are expected to face additional tightness as sanctions against Russia ramp up towards the year end and into early 2023”.

According to Gibson, “in Europe, by far the largest destination for Russian oil and products, gasoil/middle distillate stocks have remained near record lows, failing to register any seasonal increase despite higher local refining activity. Typically, storage volumes would rise during summer ahead of increased winter demand; however, without any meaningful increase in inventories in the coming months, Europe will face a precarious position heading into winter, forcing increased volumes of long-haul imports as the refined products import ban takes effect. In contrast to the middle of the barrel, gasoline stocks sit at healthy levels, with the region ramping up refinery output to maximise distillates, gasoline supply has increased as a result, supporting export flows”, the shipbroker concluded.

Source: GIBSON SHIPBROKERS LTD

It added that “across the pond, the picture looks somewhat different. US gasoline stocks sit at a 7-year seasonal low during peak demand season. Whilst storage levels typically draw down this time of year due to high demand, persistent supply tightness is likely to support transatlantic gasoline flows throughout the year. Total distillate inventories tell a similar story. However, whilst supply has risen in the US Gulf towards ‘usual’ levels, the Eastern seaboard is exceptionally tight, which could cause a supply squeeze come winter when demand peaks, necessitating imports from overseas and potentially creating a ‘reverse arbitrage’”.

“In the East, the picture is somewhat mixed. In Singapore, a barometer for the Southeast Asia market, light distillate stocks (primarily gasoline/naphtha) are near record highs for this time of year, yet middle distillate stocks sit close to record lows – a similar picture to Europe, driven by lower exports from China, resurgent regional demand and competition for Middle East exports. Strong regional refining margins should boost volumes later in the year, although volumes from the Middle East may come under pressure as Europe is forced to source alternatives to Russian supplies. Fujairah, the main products hub for the Middle East and East Africa, shows a contrasting picture yet again. Light distillates are in tight supply and close to record lows, whilst middle distillates have risen to healthy levels for this time of year. The hub is expected to grow as a destination for Russian products, making it difficult to call inventory levels in the months ahead”, Gibson said.

“So, what are the implications of these balances on trade flows? Many of these fundamental imbalances have been in place for decades, such as Europe being short of diesel. The difference now is that the deficit will have to be filled from further afield with traders already making plans for post sanctions supplies. These matters will be complicated by uncertainty over how much Russian product can be redirected. If, as claimed by President Bolsanaro, a contract between Brazil and Russia has been agreed, then more US Gulf product is likely to be redirected to Europe. Likewise, we wait to see how many Russian barrels find their way into Africa and Asia. The reallocation of flows is likely to be accentuated by low inventories, with very little supply cushion to help manage the disruption”, Gibson concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

With inflationary pressures leading central banks around the world to increase rates, a global recession could very well be in the cards moving forward. In such a likelihood, demand for shipping is bound to take a hit, although, it should be noted that there are a number of factors which could help prevent this, or at least offset its impact. In its latest weekly report, shipbroker Allied said that “recession fears have started to mount once again as many market pundits speculate that the latest slump in commodity prices noted over the past month is a precursor of global markets being set for a major cool down. During the first half of the year, the main worry has been over the rapid rise noted in raw material prices which had been feeding a surge in consumer price inflation.

According to Allied’s Mr. George Lazaridis, Head of Research & Valuations, “the numerous disruptions noted across global logistical supply chains, coupled by a resurgent demand, had already started to feed the inflation beast from 2Q21. Yet the situation in Ukraine sent this inflationary pressure into a massive tailspin, with energy prices leading the way and adding further problems to the macroeconomic mix, as the fast-paced rate by which crude oil, natural gas and coal started to rise, inevitably drained consumer demand levels and diverted cash flows away from economic growth activity and towards higher-priced energy imports.

Source: Allied Shipbroking

“In an effort to contain the inflationary pressures that had started to mount, central bankers started to raise interest rates, in effect putting a gradual squeeze on the money supply so as to keep prices under control. Yet it is this very decision that may well be pushing for a recession. The rise in interest rates is slowly cooling down demand for new homes, cars and other consumer products. The argument goes that this dampening consumer demand follows through to raw resources such as steel, aluminium, wood and other bulk commodities. Prices for most of these commodities have shown a fair drop over the past month, both in the physical and paper markets, possibly indicating that this trend may well be already taking place. In the case of the paper market, the outflow of money from commodity markets could well be also due to their lower appeal amongst speculators as the rise in interest rates help boost yields for other investments”, Allied’s analyst said.

Mr. Lazaridis added that “in the case of the physical market, further hurt has been brought about this weekend by a sharp rise in COVID-19 cases across several major Chinese cities. We already had major disruptions present a month ago due to lockdown measures placed in Shanghai. A new series of lockdowns and halting of business activity across Shanghai, Guangdong, Henan, Zhejiang, Gansu and Macau would surely pack a serious punch on sentiment as well as demand for most commodities. Within shipping markets, we have already seen the dry bulk market struggle to recover much of the lost ground it witnessed during late May and most of June.

Source: Allied Shipbroking

Coal (and to some extent grain) trading activity have helped cover some of the slack left behind while also causing a major shift in terms of what is traditionally perceived as a fronthaul voyage and a backhaul. Yet relying on coal for support in the freight market is risky in its own right. Energy commodities still hold a fair amount of momentum in terms of their prices and given the continued disruptions being felt as part of the situation in Ukraine, the expectation is that there is still a fair amount of support for further prices hikes to be felt. Yet given the current fragility of the global economy, further price hikes in key commodities such as coal, crude oil and natural gas, could very well tip things even sooner into a recession, which would lead to substantially lower demand growth even for these energy commodities. Given the current market sentiment and all these above factors at play, it is no surprise then that reports of a massive stimulus package of around $220 billion (similar in size to the stimulus released after the initial COVID-19 outbreak in 2020) in China which is underway to emerge in the second half of the year barely managed to shift markets at this point”, he concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Source: https://www.hellenicshippingnews.com/a-world-recession-could-slow-down-demand-for-shipping/