In his keynote address at the opening of SMM 2022, ICS Secretary General Guy Platten said that shipping uses around 4% of global oil production and will need to look outside of itself during the transition to zero carbon.

“As we move forward, we are going to need to focus on the remaining 96%, as these will be the same type of fuels that we are looking to use… when we look at all these new systems on display, we must not miss the 96% by just focusing on the 4%,” said Platten.

Supplying shipping with renewable fuels would take around 100% of current global renewable energy capacity, and providing zero carbon fuels for the world will take an 18-fold increase in renewable energy, said Platten, a huge undertaking.

“As we consider the current issues with constraints to supply and rising prices. We can no longer remain on the sidelines as a world takes decisions that will have fundamental impact on our industry.”

Platten repeated warnings on the availability of seafarers, and on the need to train crews to use the types of new technology on display at SMM and handle future fuels both to power vessels and as cargo.

“Here we have a challenge on our hands. We are currently facing a shortage of seafarers, and given the growing demand for STCW officers, we will need an additional 90,000 officers by 2026 to operate the world’s merchant fleet. And this is calculated before we take into effect the fact that 14% of our workforce is made up of Ukrainian and Russian seafarers.”

The war in Ukraine has complicated crewing calculations, but Platten did note one recent improvement.

“We welcomed the announcement last week that Ukrainian seafarers can now apply to be made exempt from the travel ban. All men aged between 18 and 60 will now be able to apply to leave the country to work under contract on vessels speeding up the pace at which we can transport grain back to the Ukrainian ports to where it is needed most,” said Platten.

The secretary general’s three takeaways from his speech were:

“Firstly, we must not underestimate the importance of people in any new technological developments. Our seafarers will be the ones using new technology, we must make sure that they are trained appropriately.

“Second, shipping is not on its own. We must not work in silos. We must instead look beyond our industry for opportunities to achieve our decarbonisation goals.

“And thirdly, remember that the supply chain is interconnected. What happens in one part of the world can cause the length and another understanding this means we can be better equipped for when things don’t go to plan,” said Platten.

Source: https://www.seatrade-maritime.com/regulation/shipping-can-no-longer-remain-sidelines-says-ics

Freight rates on the primary ocean trade channels are sinking during a time typically identified as the peak season in the industry after cargo owners reportedly shipped their holiday goods early and inflation dented consumer demands.

The cost incurred to ship a 40-foot container to the West Coast in the US from China is now about $5,400 per box, a drop of 60% from January 2022, per Freightos Baltic Index.

Each container shipped to Europe from Asia now costs $9,000, which is about 42% lower than observed early in 2022. At the same time, above pre-pandemic levels, the rate for both routes peaked at over $20,000 in September 2021.

Market conditions have made a sharp reversal from earlier in the pandemic. Freight rates jumped almost 10-fold during the previous year owing to port backlogs, surges in cargo, and supply chain disruptions. As a result, importers were found scrambling for space on the box ships. Retailers like Walmart -1.10%▼ chartered personal vessels to overcome the bottlenecks in 2021.

In 2022, Walmart and other major retailers ended up with excess inventory after they almost raced to import their goods earlier than usual, anticipating delays in shipping and demand that did not eventually materialize.

Manufacturers, too, moved goods earlier than usual. Some popular apparel majors like Gap GPS 0.32%▲ and toy makers like Hasbro, HAS -0.67%▼ have reported spring surges in their inventory levels that typically are observed when the holidays are closer.

Regarding spot rates, the party is officially over, mentioned Jonathan Roach, a container shipping analyst associated with a London-based firm named Braemar. The backdrop of a possible global recession, enhanced by surging energy prices and rapid inflation, is driving down the market. The COVID-19 pandemic boom in demand for consumer products has calmed, and spending on travel, leisure, and services has reportedly made its revival since 2021.

Shipping rates are set to further ease for the remainder of the year and in 2023, per shipowners and analysts. A series of new vessels will hit the water over the next two years, with net fleet growth expected to be over 9% in 2023 and 2024. Comparatively, per Braemar, container volume growth will marginally be negative next year and could rise about 2% in 2024.

The Chief Executive of Best Buy Co. BBY, Corie Barry, mentioned during an earnings call held on last Tuesday that cost pressures related to freight transportation are easing.

She added that the electronics retailer, whose sales have been shrinking, is finding it relatively easier to find freight space on trucks and ships.

This is a non-peak season as, for the first time, volumes that moved in the second half are noticeably lower than what moved during the first, clarified Peter Sand, the chief analyst at Xeneta, a maritime-data provider. He added that there are a lot of uncertainties given the ongoing war in Ukraine coupled with the massive global economic downturn.

Spot-market container shipping rates have dropped so rapidly that Xeneta highlighted in one of its reports in August that the prices have now come closer to long-term contract prices. These typically would come at a discount and even be below contract rates in some markets. Even major importers like Walmart move cargo via long-term contracts instead of paying for spot prices.

The ten largest liners have been enjoying bumper profits for the last two years. Recent quarterly earnings at Maersk MAERSK.B -0.27%▼ A/S were seen to be $8.59 billion, surpassing what it usually makes in a year. But many firms have warned about the weakening market conditions in the current year’s second half.

We ought to pay attention to the impact of inflation on consumer behaviour and demands, said China Cosco Shipping Corp., a firm that operates the fourth largest box ship fleet in the world. The industry’s supply side will likely encounter a unique situation with the changes in new vessels’ delivery.

Shipping analysts and executives have said that they do not expect freight rates to return to what was prevalent in the pre-pandemic levels. Part of the reason would be higher fuel costs. In 2019, the average price to send a container across the Pacific to the West Coast in the US was about $1,500.

Some ocean carriers are also investing billions in new and advanced technologies and fuels to reduce carbon emissions substantially. The additional cost of cleaner shipping will not go away. Instead, Roach said it would be a crucial factor in elevating rates in the long term.

References: Live Mint, The Wall Street Journal

Liz Truss who became the UK’s new Prime Minister on Tuesday made promises during the hard-fought campaign that would have a significant impact on ports and the shipping community. Truss takes over a country facing industrial unrest and a sweeping energy crisis affecting households’ power bills. Most importantly, Truss’s win has rekindled a conversation about some of the promises she made to the UK shipping community during the campaign.

Top on the agenda is the pledge to introduce what she called “full-fat freeports” in a bid to boost the growth of the UK economy. The Truss campaign said the freeports would see brownfield sites and other locations turned into investment zones. It was part of her new promises of reducing regulation and cutting Whitehall bureaucracy.

“As a prime minister, I will be focused on turbo-charging business investment and delivering the economic growth our country desperately needs. We can’t carry on allowing Whitehall to pick the winners and losers, like we have seen with the current Freeport model,” said Truss back in July.

The outgoing Prime Minister Boris Johnson had also come out strong on freeports, which became one of the flagship post-Brexit policies under his government with several freeport locations announced last year.

In revamping the policy, Truss indicated that the investment zones would benefit from a low tax burden, reduced planning restrictions, and regulations tailored on an individual basis. Truss also tied the Freeport plan into the government’s leveling-up pledge, which aims to promote growth in Coastal towns.

Supposing Truss fulfills her pledge on the freeports, some observers in the maritime industry believes it is a welcome idea for the UK as a whole and consumers.

“The introduction of freeports would mean a lot of goods can be shipped via, and handled within, the UK tariff-free. This would likely mean an increase in post-production goods and goods that normally have large tariffs applied to them (example, tobacco and alcohol) coming via the UK to take advantage of lower tariffs. It could absolutely see an increase in imports as duty and paperwork are reduced compared with calling at ports in other areas,” said Henry Waterfield, Founder and CEO of the London-based Spot Ship Company, a firm specializing in maritime digital technology.

In addition, Truss had also pledged sweeping reforms to UK trade union laws, which would guarantee minimum services during strikes and raise the minimum threshold on the number of workers needing to take part in ballots on industrial action.

One of the first tests of Truss’s stance on unions could come at the major seaports. Last month, almost 2,000 workers went on strike at the Port of Felixstowe, one of the UK’s largest container terminals. While the dispute at Felixstowe remains unsettled with the union threatening further job actions, another industrial action has been announced from September 19 to October 3 at the Port of Liverpool. Unite the union says over 560 port workers will walk off the job in Liverpool in a dispute over wages and work rules.

With the fuel transition underway, the shipping industry will need massive onboard technology investments ranging between $8 to $28 billion per year between 2022 and 2050 to reach full net-zero goals, a forecast released by the classification society DNV reports.

DNV released its sixth maritime forecast during SMM, an international maritime trade fair in Hamburg, Germany, urging cross-industry collaboration to help overcome the “ultimate hurdle” of fuel availability.

The publication considers the comprehensive production, distribution and bunkering infrastructures required to enable the maritime industry’s shift to carbon-neutral fuels.

It also presents an updated outlook on regulations, drivers, future technologies, and costs for decarbonizing shipping.

The report models two different decarbonization pathways: ‘Current IMO ambitions to 2050’ and ‘Full Decarbonization by 2050’.

DNV’s modelling points to a diverse future energy mix comprising both fossil and carbon-neutral fuels, with fossil fuels gradually phased out by 2050.

In the forecast, DNV highlights the importance of cross-industry collaborations which are believed to play an important role in making decisions for the future carbon-neutral fuel mix.

Coordinated plans by all stakeholders, including major energy and fuel providers and ports, are crucial while public incentives must encourage first movers to participate in a nascent global network of green shipping corridors, DNV says.

“No industry can decarbonize in isolation so global industries need to make the right choices together, and sustainable energy should be directed to where it has the biggest impact on reducing greenhouse gas (GHG) emissions. The ultimate hurdle is fuel availability and to overcome it, supply chains must be built through cross-industry alliances”, said DNV Maritime CEO Knut Ørbeck-Nilssen.

He stressed that 5% of the energy for shipping should come from carbon-neutral fuels by no later than 2030, which requires substantial investments in both onboard technologies and onshore infrastructure.

The fuel transition has already started, with 5.5% of ships (gross tonnage) in operation and 33% of gross tonnage on order today able to operate on alternative fuel (largely dominated by LNG today), the report states.

DNV forecasts that onboard technology investments required for the ‘Decarbonization by 2050’ pathway scenarios will range from $8 to $28 billion per year (depending on which fuel type has the largest uptake) between 2022 and 2050.

Investments of between $30 and $90 billion per year to 2050 are needed for the onshore fuel supply chains.

In terms of fuel choice, uncertainties around future price and availability mean that a clear winner among the many options – ammonia, methanol, diesel or methane, produced from sustainable biomass, renewable electricity or fossil fuels with carbon capture and storage – cannot be identified yet or in the near future.

In the report, DNV outlines under what conditions each option will proliferate and creates a GHG Pathway Model that estimates the investment costs of implementation of new fuel supply chains and fuel technologies as well as energy efficiency measures onboard the world fleet.

“Two thousand ships are expected to be ordered annually to 2030 but there is still no silver-bullet fuel solution available”, said Ørbeck-Nilssen.

“Against this uncertainty, the new Maritime Forecast to 2050 report can serve as a beacon of expert advice and smart solutions to ensure vessels stay commercially competitive and compliant over their lifetimes, underpinned throughout by the enduring need for safety”, he concluded.

Source: https://www.offshore-energy.biz/shipping-needs-up-to-28-billion-per-year-to-switch-to-carbon-neutral-fuels-by-2050-dnv-forecasts/

A collation of leading companies from across the shipping industry are coming together in the latest effort to address the ongoing controversy over methane emissions from ships fueled with LNG. The Methane Abatement in Maritime initiative is a technology acceleration program aimed at identifying, accelerating, and advocating technology solutions to measure and manage methane emissions, commonly referred to as methane slip.

The shipping industry has been quick to adopt LNG in the last few years at least as a bridging fuel to support decarbonization due to its ability to reduce or eliminate harmful emissions including CO2, Nitrogen Oxides (NOx), Sulfur Dioxide (Sox), and particulate matter. Scientists, environmentalists, and other activists however argue that any benefits are far outweighed by the release of unburnt methane which is more harmful to the environment as it is a potent greenhouse gas that accelerates global warming.

In establishing this new initiative, the organizers point out that “no globally recognized methods for measuring methane slip” currently exist. As part of their aim to minimize the environmental impact of LNG used in shipping, their first goal is to establish a methodology of measuring the extent of the problem and developing technologies to reduce methane slip. It is hoped that the new solutions identified by the innovation initiative will help the industry to understand the extent of, and then manage, their methane emissions activities.

“Shipping currently lacks the information and tools they need to accurately measure the amount of methane released by LNG-fueled ships and the extent of this impact,” said Steve Price, Head of Partnerships at Safetytech Accelerator, which will lead the program. “Understanding the extent of this methane slip will allow companies, society, and policymakers to understand LNG’s real environmental impact. Empowering markets to channel investments to new technologies that can reduce methane slip, or to other transition fuels.”

LNG advocates argue that new engines and technologies are largely eliminating methane slip from the ships. Environmentalists however dismiss these assertions and last year one group used infrared cameras to illustrate what they said is an increasing problem for the shipping industry as the number of LNG-fueled ships increases.

Since 2010, the number of vessels using LNG has grown consistently by 20 to 40 a year. In its market analysis released yesterday, DNV for example said that LNG vessels make up the majority of in-service and on-order vessels using alternative fuels. The class society calculates that there are over 900 LNG-fueled vessels operating and another 500 ordered.

The new initiative will define what constitutes negligible methane emissions and then ensure that the sector meets the targets.  Once the solutions have been validated, this collation will seek to endorse them to the industry. They are also committed to encouraging the adoption of proven abatement technology at scale. Their goal is to have solutions in place by 2023. Separately, there are several other groups also working on developing filtering technology to remove methane from vessels’ exhaust.

This new program is also focusing on supporting the next generation of biofuels. They highlighted that measuring the scale of methane emissions, and understanding if they can be managed to negligible levels, would contribute to the understanding of Liquefied Bio Methane (LBM) and Liquefied synthetic methane (LSM) and if they are viable pathway fuels to help achieve the industry’s 2050 decarbonization targets.

Established by Lloyd’s Register, the program will be led by Safetytech Accelerator. Seven industry-leading companies, Maran Gas Maritime, Mediterranean Shipping Company, Carnival Corporation, Seaspan, Shell, Lloyd’s Register, and Knutsen Group, are partnering with the program. It will also draw on the expertise of academics, civil society, and other stakeholders, such as the National Physical Laboratory.

Source: https://www.maritime-executive.com/article/shipping-industry-initiative-seeks-to-measure-and-abate-methane-slip

HONG Kong International Airport (HKG) has been recognised for its cargo proficiency, reports the American Journal of Transportation.

The airport was named the world’s busiest cargo airport after carrying the most tonnage for 2021, beating last year’s top-ranking Memphis International Airport.

The Airports Council International (ACI) annual world rankings highlighted that HKG handled five million tonnes of cargo last year, an increase of 12.5 per cent in 2020.

‘It’s a testament to hong Kong International Airport’s solid work over the past few years in its bid to bridge gaps from the Far East to the rest of the world for cargo carrying,’ said HKG Middle East manager Vishnu Rajendran.

‘Our hub has always been an outstanding international airport with its ease of connections, world-class lounges, and diverse range of retailers, so to now have the cargo element recognized is extremely promising.’

Cathay Pacific’s cargo service is responsible for 25 per cent of the airline’s annual revenue.

‘The dedicated Cathay Pacific Cargo Terminal has gone from strength to strength in the past few years with innovation and passion at the forefront of the dynamic team,’ said Mr Rajendran.

‘Focusing on enhanced efficiency, reliability, and visibility all improves the customer experience and adds value to the backbone of end-to-end services. Designed for an annual air cargo throughput capacity of 2.6 million tonnes, the terminal is a common-use facility open to all airline customers.’

The airline also launched its Priority solution, offering three service tiers:

First (PR1), Essential Plus (PR2), and Essential (PR3).

Also, Cathay Pacific Cargo has become one of the first carriers to pioneer two new milestones in the Cargo iQ Master Operating Plan (MOP).

The new milestones, FOW (freight out of warehouse control) and FIW (freight into warehouse control), will bring more transparency to the overall shipment journey.The milestones are operational at the Cathay Pacific Cargo Terminal in Hong Kong, with a view for roll-out across the network.

Source: https://www.seanews.com.tr/hong-kong-receives-applause-for-extensive-cargo-efforts/194338/

French transport giant CMA CGM is creating a five-year investment fund of 1.5 billion euros ($1.5 billion) aimed at accelerating its energy transition in shipping and logistics, it said on Sunday.

The fund will support industrial production of new fuels and low-emission transport solutions across the group’s businesses, including maritime, overland and air freight shipping and port and logistics services, it said in a statement.

Among other initiatives mentioned on Sunday, the group will develop a biomethane production and liquefaction project to produce up to 100,000 tonnes by 2025, with the possibility of doubling output by 2027, it said.

CMA CGM also referred to a joint plan announced in June to partner energy group Engie in the production of 11,000 tonnes per year of biomethane in France starting in 2026.

CMA CGM, privately controlled by the Saade family, on Friday reported second-quarter net profit more than doubled to $7.6 billion, also surpassing the first quarter.

Its soaring profits prompted the French government to call on the company this year to help to cushion inflationary pressures. CMA CGM responded with shipping rate discounts for cargoes to France. Read full story

Source: https://www.marinelink.com/news/cma-cgm-launches-billion-energy-fund-499223

The 46,000 m³ dual fuel (LPG) vessels are scheduled for delivery in the fourth quarter of 2024 and the first quarter of 2025 respectively. The price tag for the newbuilds has not been revealed.

Exmar said that the JV has an option for two additional vessels of 46,000 m³ slated for delivery in 2025. As disclosed, these ships have the option to be delivered with ammonia dual-fuel propulsion.

EXMAR currently owns/operates 19 midsize gas carriers, three very large gas carriers, and 10 pressurized vessels.