By Mike Wackett (The Loadstar) –
The tenth London International Shipping Week (LISW) got under way yesterday with well-attended panel discussions at venues across the city, and – unsurprisingly – even better-attended evening networking sessions.
The self-appointed ‘showcase for green shipping’, LISW’s overriding theme this year is the decarbonisation of shipping and, in particular, how to accelerate and fund the process.
Chris Shirling-Rooke, CEO of Maritime UK, the umbrella body for the maritime sector, believed sufficient progress in decarbonisation will only happen if all stakeholders work together, and that the UK could be at the forefront of the transition.
Ahead of the event, he said: “If we are going to decarbonise, we are going to have to work with government, and government is going to have to work with the industry.”
Nevertheless, at events attended by The Loadstar yesterday, the question that kept cropping up was: how is the transition to more-expensive green fuels to be funded?
Ultimately it was agreed the extra cost has to be passed on to consumers, the majority of whom have shown willingness to pay a little extra for a ‘greener’ product.
However, shipping’s infamous lack of transparency – and in terms of container shipping, the mistrust between shipper and carrier –could hinder progress in the absence of regulation.
Carrier-shipper relationships have, arguably, sunk to new lows following the pandemic-induced billion-dollar profits made by shipping lines over the past two years; during which time some carriers refused to talk to their shipper customers, other than to raise their freight rates.
But now that liner service rates have ‘normalised’ to break-even or below, shippers are back on the front foot in rate negotiations.
Indeed, ‘cost reductions’ are the new mantra this year at liner offices in Europe and Asia, in order to mitigate the impact of a toxic mix of rate collapses and reduced demand across carrier networks.
Moreover, the lines’ procurement officers are back out in force, trying to squeeze the last drop of cost out of service providers, with the previous boom a fast-fading memory.
And it seems that, although carriers will justifiably ask their shippers to help contribute towards the cost of more-expensive green fuels, there is no evidence to suggest that the lines themselves are prepared to pay more for greener services.
In fact, feeder operators The Loadstar has spoken to are frustrated at the knock-back they have received from carriers to suggestions that they should pay a premium for green methanol-fuelled relay services.
Meanwhile, at a Blue Communications-organised panel discussion on shipping decarbonisation – intriguingly subtitled ‘An inconvenient truth?’ – a valiant attempt was made by the moderator to steer the debate towards the perception of non-industry people to shipping’s efforts to decarbonise.
However, the general consensus from this panel, and echoed at others, was that the decarbonisation message was not getting across, and that without regulation, similar to the IMO 2020 sulphur cap, progress would be too slow.
The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
Monthly Insights from the Helm
Dive into a sea of information with our meticulously curated weekly “Dispatch” email. It’s more than just a newsletter; it’s your personal maritime briefing.