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The Lloyd’s List Podcast: Where does shipping fit into the EU Net Zero Industry Act?
12:53EUROPE launched its much anticipated response to the US Inflation Reduction Act (IRA) this week and while it is not a shipping specific move there are significant implications for shipping. The Net Zero Industry Act essentially sets out plans to turbocharge the production of clean energy technologies across the EU, while enticing more green investment to the bloc, and reducing member states' reliance on imports from China and other nations. The Act sets out measures to speed up the permits process and boost power grid infrastructure and it includes domestic production targets for eight industries, including solar, wind, batteries and electrolysers. But not shipping. However there are important considerations for shipping, not least the fact that it aims to accelerate the use of CO2 capture and storage and improve conditions for investment in net-zero technologies. The headline target of the proposed regulation is a goal for 40 per cent of the bloc's demand for a raft of "strategic" clean technologies to be met with products, services, and materials sourced within the region by 2030. So this is about Europe competing with the US and China. Brussels’ response to the IRA has involved loosening subsidy rules to keep companies in the region. It also wants to curb its dependence on China for much of its green industry supply chain and create jobs domestically. On the podcast this week, Sotiris Raptis, the secretary general of the European Community Shipowners’ Association joins Lloyd’s List editor Richard Meade to discuss what all this means for shipping and why we should care about how the final details are worded.
Collaboration will open shipping up to lasting efficiencies
18:01SPONSORED CONTENT - in association with Rightship HOW easy is it to collaborate with competitors, people who want to take our business away from us? Who should we collaborate with, and to what purpose? These are the key questions addressed by Tarun Mehrotra, chief strategy officer, at RightShip, on this podcast. While acknowledging that working together for a greater good will demand rethinking how businesses operate, he insists the shipping industry must take heed of the expectations of society at large. Shipping does not work in isolation. The industry exists to serve world trade, and customers are demanding that each element in the supply chain does its best to become a zero-harm business. That means stakeholders collaborating, said Mr Mehrotra. A clear example of where sharing best practice works for all parties is maritime safety. It is a space where there should be no question about working together. “Safety performance cannot be a competitive advantage — one life lost is one life too many.” Collaboration is also being driven by the needs of decarbonisation, which involves every business. In a multi-fuel future, ship owners, managers, and charterers can share many lessons about testing new technologies on board. Not all trials are successful and there’s little value in repeating a failed experiment over and over. It is expensive. Knowledge must be shared across the value chain. “We have to sort out the framework for collaboration on data exchange standards; on who owns what data, and what we can do with it,” Mr Mehrotra says, “and there are technological solutions around how we can do that.” Like so many companies in shipping, Rightship is in transition. It is shifting from a vetting-focused business to one with a vision firmly centred around zero harm and finding ways to make it come to life. Transition is the perfect time to consider the possibilities that open up through collaboration, partnership and association. He argues the case for going back to the metaphorical drawing board to brainstorm a whole new business model for maritime, rethinking commercial contracts to unlock efficiency gains, collaborating across the business model to attract and empower new skills and talent. Decarbonisation will galvanise the industry into collaboration, he concludes, and the opportunities are endless.
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The Lloyd’s List Podcast: Why the box sector is in for a bumpy ride
20:20THE container sector is no stranger to irrational exuberance. The last time we had an overcapacity market from 2016 to 2019, we saw nine off the top 20 carriers disappear in the space of two and a half years – a period that saw the carriers losing money on nearly every box they were moving. And as one of guests on this week’s edition of the Lloyd’s List Podcast points out, that was scary. But the only thing scarier than shipping lines with no money is shipping lines with money. The box sector is going through something of a reset at the moment. Freight rates have fallen sharply as demand has slumped. A flood of new tonnage is joining the global fleet at a time when carriers are being encouraged to remove capacity from the market, putting further pressure on both rates and reliability. It’s no surprise then several of the lines are warning that earnings this year are set to fall sharply, but this feels to be more than just a cyclical downturn. There are very few certainties and some wildly different strategic approaches being set out to deal with what happens next. When the container set gathered for their annual conflab at TPM last week it was notable that the keynote speaker was not one of the big beasts of box boardrooms, but retired general and former CIA director David Petraeus, who issued a stark warning that the era of “benign globalisation” was over and that the expectation that shipping could see the same levels of steady growth it was used to was irrational in the context of a changing world. There was lots of talk about how tensions in the Asia-Pacific region threatens to overturn the “logic of globalisation”. Container shipping is looking increasingly nervously at the big macroeconomic and geopolitical uncertainties that will ultimately decide their fate. So, in the wake of TPM we are taking a quick top level look this week at how the container sector is faring against the backdrop of a post-pandemic slowdown and some longer-term questions about the future of globalisation. Speaking on the podcast this week • James Baker, Lloyd’s List Containers Editor • Tomer Raanan, Lloyd’s List US Correspondent • Alan Murphy, chief executive and founder of Sea-Intelligence
The Lloyd’s List Podcast: Is shipping taking Diversity, Equity and Inclusion seriously?
20:45Every study and every ounce of common sense points to the fact that for any organisation that relies on its people, it should be a strategic priority to broaden your talent pool, enlist a diverse range of skills and perspectives, and make the most of their potential. Just as Countries with more gender equality have better economic growth. Companies with more women leaders perform better. Shipping has a global talent shortage. We know that. The structural long-term challenges in the maritime industry requires much better collaboration, it requires new talent and at the heart of that lies an immediate need to make improvements on diversity, equity, and inclusion. So why is DEI not at the top of the ESG agenda? And why in 2023 is it still the case that women represent only 1.2% percent of the global seafarer workforce. That’s the figure from the last BIMCO/ICS Seafarer Workforce Report by the way, which depressingly enough was actually a 45.8% increase compared with the 2015 report figure. In shipping’s boardrooms, the picture is perhaps less pronounced, but no less concerning. Women account for just 29% of the overall industry workforce and the last edition of the Diversity Study Group’s annual report showed clear evidence that there is still a significant lack of ethnic diversity and female representation in senior roles, although representation at lower-level roles was improving. But we are still not getting even some of basics right. According to the Diversity Study Group’s last survey which covered a good global sample of shipping companies across the sector, 35.8% of women responded that they do not feel that they can raise discrimination concerns at work or declared they would “prefer not to say”. That suggests there is still reluctance among women to ‘rock the boat’ if they face discrimination. At sea the issue is even more extreme. The "shocking" extent of discrimination on board vessels was revealed in a study last year that saw 60% of all female seafarers reporting instances of sexual harassment and bullying. So this week, ahead of International Women’s Day on March 8th, Lloyd’s List editor Richard Meade spoke to two experts in the field of DEI to look at some of progress made but also ask why the industry is still not taking DEI issues seriously enough. Joining Richard this week are Elpi Petraki who was elected president of the Women’s International Shipping & Trading Association in October last year. And Heidi Heseltine, Founder of the Diversity Study Group, which was formed in 2018 and is the first organisation dedicated to diversity, equity and inclusion (DEI) in the workplace across the global shipping and maritime sectors. The DSG are the knowledge partners of the Global Maritime Forum’s All Aboard alliance.
The Lloyd’s List Podcast: Why don’t shipping companies have a credible ESG plan?
21:44The lack of transparency and substance being attached to ESG announcements in shipping has become a pretty consistent theme of the Lloyd’s List Podcast over the last few years. We have paraded a long queue of earnest environmentalists and eager executives in front of you, all saying the same thing - that change is afoot. But what does that actually look like in terms of boardroom decisions, and are decision really being made or just talked about? There’s no shortage of press releases touting ESG credentials, but as one of the more honest shipowners we spoke to this week explained frankly: “we don’t have the balance sheet to save the world”. The reality is that many, if not most climate policies triumphantly announced by companies (and arguably governments) lack depth, detail and credible intermediate targets if you are measuring them against strict science-based targets aligned to the Paris 1.5 degree goals. Creating credible ESG strategies is difficult. Quite apart from the lack of regulatory or pricing certainty, the corporate overhauls required to genuinely change processes and future-proof company initiatives for tomorrow is a step above what most small companies struggling to keep up with today’s compliance challenges can deliver right now. And that’s a problem, because while the large corporates are racing ahead with sustainability initiatives chasing a competitive advantage today, tomorrow that same sustainability requirement becomes more about having a licence to operate. What is voluntary right now, will become mandatory requirements for companies and will be important when they seek to raise capital. Shipping has fallen behind other industries on ESG commitment. Those that have made progress are mainly large, global companies, representing only part of the world fleet. Thousands of vessels, millions of seafarers and gigatonnes of CO2 are currently not covered by ESG ambitions. This is not about deliberate greenwashing, this is about the sheer scale of change required from companies over the next few years and the fact the reality that many shipping companies are struggling. Joining regular podcast host Richard Meade this week to discuss these issues are: Tanja Dalgaard is Chief Strategy & Operations Officer and part of the Leadership Team at the Mærsk Mc-Kinney Møller Center for Zero Carbon Peter Jameson is the global topic lead for sustainability and climate within Boston Consulting Group's Infrastructure, Cities & Transport team. Dr Jean-Marc Bonello is a principal consultant at UMAS International, a lead author of the Sea Cargo Charter and co-author of the Fourth IMO GHG Study.
Biofuels: Serious sustainability or expensive energy?
14:37Lloyd's List Sponsored content in association with Argus Media Biofuels do not get the media coverage enjoyed by ammonia or hydrogen, but expertise is growing. Bunker suppliers and shipowners are working with fuels specialists to assess the potential as the shipping industry moves towards its 2030 targets. The term biofuels is broad. It covers a range of energy sources such as bioethanol and biodiesel. Biodiesel itself is used interchangeably with FAME (fatty acid methyl ester), a generic chemical term for a bio-based component from renewable sources like soya oil, used cooking oils, and animal fats/tallow. What makes this energy source worth exploring is the fact that biofuels can be fully renewable and almost 100% CO2 neutral. Transportation, storage, and handling are simple as biofuels can be dropped into conventional fuels, and they must therefore be regarded as an attractive contribution to the sustainability discussion. Are biofuels significant for shipping’s sustainability or merely a minor element for certain vessels operating in restricted waterways? Can claims about zero harm be justified? What’s the difference between a B20 blend and a B30 blend, and should we care? In this podcast, two marine fuels experts from Argus Media, which provides commodity and energy price benchmarks, argue there’s a good case is to be made for following the progress of biofuels as a global option. Sammy Six and Catherine Caulfield — respectively deputy editor, Marine Fuels, and business development manager, Marine Fuels, Bitumen, and Base Oils — explore industry demand, biofuels availability and likely cost, regional variation of blends, and Argus’ own market-assessed pricing. As Ms Caulfield observes, biofuels are currently available for bunkering while other alternative fuels such as methanol are still under development. Container and cruiseship owners are assessing the benefits because their customers are driving demand for lower-carbon solutions and are willing to pay the higher costs associated with greener solutions. That’s biofuels: sustainable, available, and compliant with International Maritime Organization and customer requirements.
The Lloyd’s List Podcast: 2023 P&I renewals uncovered
20:22Our Victorian shipping forebears designated twelve noon on 20 February each year as the notional time and date at which Baltic ports became ice free, and that has given birth to one of the great traditions of marine insurance. Two centuries later, midday on 20 February still marks the hard cut-off point by which the vast majority of shipowners must have in place cover for liability in everything from collisions and spills to seafarer injuries and deaths. Without protection and indemnity policies, ships cannot trade. No state wants uninsured vessels transiting its territorial waters and no port will admit them without the guarantee that costs will be met if things go badly wrong. For around 90% of the world fleet, P&I cover is provided by one of 13 P&I clubs, as these not-for-profit mutual monoline insurers are known. Through their trade association the International Group, and an elaborate scheme of retentions, pooling, captives and reinsurance almost beyond mortal ken, ensures that cover can run as high as $2bn and beyond in the worst cases, for very modest cost. The workload of renewing policies cannot be evenly spread throughout the year, even for the sake of an easy life. But even so, each contract has to be concluded within the established time limit. That leaves us with the renewal round. While a few straightforward deals get signed off towards the back end of each calendar year, things only really get going after everybody has recovered from the Christmas and new year break. Sometimes negotiations go right to the wire. This year the process has seen multiple complications, as we shall hear in this week’s edition of the Lloyd’s List shipping podcast. Progress has been unusually tardy, for reasons that we’re going to discuss. Clubs have had to contend with booked but unrealised investment losses thanks to turbulence on the financial markets, which has led to downgrades from ratings agencies. Then there is the sensitive matter of pricing. P&I clubs are not for profit, but they do have to bring in sufficient premiums to keep the show on the road. 2023 marks the fourth successive year of substantial premium hikes, with a 10% going rate. Unsurprisingly, some owners have been reluctant to cough up. To add to the complexities, two of the 13 International Group affiliates, North and Standard, are due to merge. When? Well, noon on 20 February. That has seen some big boxship players split their fleet to avoid over-reliance on the combined entity. Lloyd’s List prides itself on the best marine insurance coverage anywhere, and our insurance editor David Osler has been busy talking to some of the key players in the sector. Our podcast guests today are two brokers and two club chief executives. The former are Stephen Hawke, managing director of PL Ferrari & Co, and Alex Vullo, executive director of Gallagher. The latter are Andrew Cutler of Britannia and Jonathan Andrews of Steamship, who takes over from his predecessor Stephen Martin on … you’ve guessed it … 20 February.
Storm warning: The impact of weather data on decarbonisation
19:22Lloyd's List Sponsored content in association with Orbit MI WEATHER has always mattered for shipping; it will matter even more as the climate changes. The 2021 report from the United Nations Intergovernmental Panel on Climate Change stated that it is “unequivocal” that human influence has warmed the atmosphere, ocean, and land. Disruptive weather events impact all sectors of the supply chain. For shipping, it is becoming imperative to understand what lies over the horizon weather-wise, and to leverage that information to make smart decisions. There has been a tremendous improvement in the accuracy of weather forecasts over the past decade, progress that has run in parallel with the functionality of maritime software. The need now is for operational data and weather data to combine to inform decision-making at every level of maritime business — especially in pursuit of decarbonisation and safety goals. Industries and businesses embrace digital technology at different speeds, however all software providers are looking to present complex information in a way that's easily understandable and makes a significant and valuable impact, whatever the customer’s specific need. Towards the end of 2022, OrbitMI, the vessel performance software specialists, launched an integration with weather analytics experts DTN to upgrade weather-optimised voyage routeing. The Orbit Weather+ digital solution, powered by DTN marine weather APIs, has been implemented fleet-wide by Stena Bulk, with several pilots underway at other companies. The solution aims to find the smartest, safest, and most fuel-efficient route using AI-based machine learning to analyse constantly updated weather data fed into the Orbit VPM system through DTN APIs. Renny Vandewege is a meteorologist now focusing his attention on the impact of weather events on businesses across agriculture, aviation, utilities, and maritime. As vice-president, global commercial at DTN, he understands why shipping has been slow to merge weather data into the broader suite of cloud-based software. “Weather is just there; you feel you can't control it — which is unfortunately true. But we are learning that as we get more data sets, we can see both weather and the ocean impacts of weather more clearly,” Mr Vandewege tells Chief Correspondent Richard Clayton on this podcast. David Levy, chief marketing officer at OrbitMI, says the top request from customers has been for weather data to be incorporated into optimisation software. “The question is how can we take advantage of all the weather data that’s out there?” Mr Levy asks. “There are many services and there’s no shortage of weather data. We had to augment what we already have in our platform, and that’s how we started to work with DTN.” This podcast addresses the reasons why weather should no longer remain in its silo, why weather data must be seen as an integral element in smart maritime decision-making, and how an understanding of climate change-influenced rougher seas, changing wave periods, more precipitation events, and more powerful hurricanes will impact shipping’s decarbonisation journey.
The Lloyd’s List Podcast: Why shipping’s sanctions risk is here to stay
19:46The public debate in the west about whether sanctions levelled against Russia are working is inevitably complex, but ultimately is immaterial to most companies struggling to comply with them. The point is that sanctions are growing in volume and complexity and, given their political popularity, they are not going to be disappearing any time soon. This week’s edition of the Lloyd’s List Podcast takes a look at how the operational requirement to stay on the right side of an increasingly complex compliance landscape is reshaping the way that shipping businesses operate. Because shipping is struggling. While the finance sector may have invested billions of dollars on sanctions compliance capabilities over the past decade, large swathes of the shipping industry has not kept pace. And with Russian sanctions now reaching across the corporate spectrum like never before, a compliance crisis looms for many. Helping us navigate our way across the minefield of sanctions and understand what’s driving these changes, we are joined this week by two leading experts: Leigh Hansson is a partner in the Global Regulatory Enforcement group and a leading lawyer in our International Trade & National Security team. Agathe Demarais is the global forecasting director of the Economist Intelligence Unit (EIU). She was previously a senior policy adviser for the French Treasury in Russia and Lebanon, working directly on sanctions and other economic and financial issues. She has recent published Backfire: How Sanctions Reshape the World Against US Interests https://www.amazon.co.uk/Backfire-Sanctions-Reshape-Against-Interests-ebook/dp/B09YMXPWVR
The Lloyd’s List Podcast: How to retrofit a more efficient shipping industry
16:47The ships of the future will be more efficient. But the global fleet currently carrying the 11bn tonnes of seaborne trade annually will be operational into the 2030s and so keeping the existing ships running longer more efficiently is part of the overall balance required to green shipping’s energy transition. There is an entire industry out there with proven technology that can make existing ships up to 20% more efficient with relatively attractive payback periods promised, at least on paper. But it is inevitably more complex than that. Most shipowners have assessed technical options for retrofits and operational efficiency improvements for existing vessels. However, lack of clarity on technical performance, financial accessibility and who stands to benefit from any investment has too often hampered uptake. Until there is clarity, investment decisions are likely to remain challenging. This week’s edition of the podcast explores the barriers and potential solutions to more widespread retrofitting of the existing fleet. Featuring expert insights from: • Michael Parker, Chairman of the Poseidon Principles • Charles Haskell, LR's Decarbonisation Programme Manager, • Tony Foster, Chief executive Marine Capital • Tuomas Riski, CEO of Norsepower