FROM CHAIRMAN



A sea change


I would like to think that 2021 will be an exciting year and that once Covid-19 vaccines have been widely distributed the pandemic will recede, allowing business to flourish again.




The concept of a ‘post-Covid’ world has been debated at some length. Within the maritime sector we believe the concept will soon materialise into a new reality defined by environmental and sustainability initiatives. In the ‘pre-Covid’ era at the beginning of 2020, the industry was still arguing about the merits of scrubbers for SOX elimination purposes, whereas many are now calling for the elimination of scrubbers. Canada recently called for a ban on scrubbers and the European Union is following suit. Meanwhile, a large proportion of newbuildings are specified to be built with dual-fuel propulsion systems (LNG or LPG). Although dual fuel might not be the perfect solution, it offers several advantages including highly reduced CO2, SOX and NOX emissions and emits no particulate matter or heavy metals. Regulations have not yet addressed the latter two, but given how cancerous they are, it is only a matter of time. Admittedly, LNG has a GHG leakage issue caused by methane slip, but engineers are working on it and if not fully solved, it should be significantly improved soon.


If there is one memory we should retain from the bitter experience of Covid-19, it is that science and technology enable us to overcome the most difficult challenges. Nobody could have imagined that an RNA vaccine would be developed and made available to counter the Covid pandemic in such a short space of time, but this has happened.



Shipping regularly finds itself in the line of fire of public opinion. We need to emphasize the very positive aspects of the industry and issue regular reminders that transportation by sea is the most energy efficient and least polluting means of transport when measured by ton mile. The industry is undoubtedly a victim of its own success, inevitably generating emissions because it transports more than 90% of globally traded goods. News footage of vessels belching out plumes of black smoke detracts from the public’s appreciation of the huge progress made by the industry over the past 10 years, amounting to an eco-revolution. The shipping community must continue with this revolution and further minimise its carbon footprint, but also learn to publicise its achievements more effectively.



Shipping has already acted responsibly, adopting many drastic measures to decarbonise. These efforts, under the leadership of the IMO and through independent initiatives, must continue regardless of the difficulty in uniting all players of such a global industry.



Thankfully there are many existing initiatives and even more in the pipeline – all are welcome. Often, we can achieve something ‘new’ via the ‘old’; pictured is Turner’s famous painting of a steaming tugboat towing the Tall Ship Fighting Temeraire to her final berth in preparation for breaking, depicting the end of an era. A 21st century version of the painting might depict a wind-powered vessel accompanying a fossilfuelled ship to a Hong Kong Convention compliant recycling destination!

We can be proud of the early lead taken by the industry to self-regulate, ranking ships according to their relative energy efficiency to enable users to make better informed decisions and deliberately move towards a more sustainable future. This is now part of a global trend where everyone is ranking everything (airlines, hotels, restaurants, shops) and we should not be surprised by the demands to further enhance the transparency of vessels’ fuel consumption and much more. Low earth orbit satellites will soon exponentially boost ships’ internet speeds, leading to unprecedented levels of ship-to-shore real-time data transmission.

While waiting for more scientific innovation, technology and the establishment of future propulsion methods, the industry can try to be more sober with its energy requirements by adopting and regulating slow steaming. Speed limits exist on roads, with many countries stipulating speed reductions based on air quality monitoring. Official adoption of lower design speeds, rather than operating vessels well below their design criteria, would help naval architects optimise machinery design. A shift in the economics of shipping towards carbon reduction can also be achieved through the mechanism of carbon credits, created and/or purchased to offset the emissions of a fleet or a specific voyage. Carbons credits constitute a powerful tool, enabling participation in greening projects within and outside the shipping industry.


Mariners

As Covid-19 cast its shadow over the world, the importance of many secondary sector jobs that turn the wheels of the global economy and practically speaking sustain our subsistence were rediscovered. Mariners are a key group of workers who in 2020 and now into 2021 are enduring unprecedented uncertainty. Many have been at sea non-stop for several hundreds of days, prevented from disembarking by new Covid-19 regulations that ports have had no choice but to adopt. Home has become a distant memory. We must pay tribute to them for the hardship and pain they have suffered and continue to suffer. While technology may lead to fully automated ships in the medium-term future, mariners currently play a vital role and their well-being must be prioritised.


Predictability and volatility

Shipping is an increasingly rules-driven business, with swathes of new international, national and local regulations that must be adopted and adapted to each year. This is of course in addition to the ever-present volatility in freight rates that within a few weeks can see a ten-fold change. In 2020 we saw VLCC rates hit sky-high levels of over $200,000/day while they also plumbed abysmal lows of around $2000/day. In this ever-changing world, Owners and Charterers need to continue using and developing suitable riskmanagement tools, such as FFAs, to take more assured decisions. The proliferation of internet-based, data-driven information and trading platforms is a natural reaction to daily instability and is ultimately an effort to increase predictability.

In many respects, the transformation of the sailing fleet into a steam powered fleet came about through the need to circumvent the lack of regularity in a world undergoing an industrial revolution. This revolution put down roots for the modern economic globalisation that shipping has simultaneously enabled and prospered from. It is hard to believe that the sailing fleet will make a full return, but it may well assist in part to counter the wider negative effects of industrialisation that are being felt today.


François Cadiou
Chairman