5 adverse effects of climate change on maritime transport

climate change in maritime transport

The maritime sector is a major global industry. In fact, an article published by the World Bank reports that shipping accounts for 80% of all world trade’s total volume. However, like other lucrative industries, it doesn’t only deal with accommodating a high demand for services, but also constantly faces numerous environmental issues.

Why exactly should shipping companies be involved with battling climate change? There are countless reasons, but one that stands out the most—if we assess matters through an economic perspective—is that climate change is a large threat to the industry itself.

Below, we’ll discuss several impacts of climate change on maritime transport, specifically on its efficiency and profitability.

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World’s largest LNG-Powered containership launched

LNG powered containership

Climate change has been and is at the heart of many initiatives within the shipping and freight industry.. Whether it is IMO’s proposed implementation of IMO 2020 regulations 98 days down the road, or the use of bio fuels to run ships or the use of scrubbers or LNG powered ships, there are several initiatives being followed by the industry..

In line with this, Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group announced in 2017 that the group would be ordering a series of 23,000-TEU containerships that would be the world’s first ever to be powered by LNG (liquefied natural gas)..

This decision became a reality when the group announced the launch of the world’s largest LNG powered containership..

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Cost impact of IMO 2020

IMO2020 - shipping and freight resource

IMO2020 is getting serious commercially..

As everyone may have read, as of January 2020, all ships are required to use fuel with a sulphur content of 0.5% or less on all of the world’s oceans..

The ship owners have a few options to ensure compliance and meet lower sulphur emission standards, each with some pros and cons..

Let’s look at the cost impact of IMO2020..

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Maersk Honam becomes Maersk Halifax

shipping and freight news

Like the proverbial Phoenix rising from the ashes, Maersk Honam has a new lease on life as Maersk Halifax.. As has been reported quite elaborately here, on the 6th of March 2018, Maersk Honam, one of Maersk’s ultra-large container ships caught fire in the Arabian Sea between India’s West Coast and Oman while en-route from Singapore to Egypt..

Five crew members perished in this incident which was one of several maritime disasters which have container ships in recent history..

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Incoterms® 2020 release date announced

Incoterms 2020 Rules - Shipping and Freight Resource

The Incoterms® rules were developed by the International Chamber of Commerce to facilitate international trade and for the interpretation of the trade terms that the parties to a contract of sale could agree to apply..

Incoterms® were first introduced in 1936 and were revised in 1957, 1967, 1976, 1980, 1990, 2000 and 2010 to accommodate changes as global trade developed and evolved..

Currently, in its 8th version (Incoterms® 2010), the Incoterms® rules have become an internationally recognized and accepted standard and are used worldwide in international and domestic contracts for the sale of goods and have become an essential part of the day-to-day international trade and domestic trade..

The ICC which is celebrating its centenary year recently announced the release date for the latest version of these rules which is the Incoterms® 2020..

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Maersk pilots carbon-netural shipping

shipping and freight news

With #IMO2020 fast approaching – 194 days away as of this article – shipping lines, customers and ship owners are working hard on finding ways to be compliant (whether they like it or not)..

This is especially important in the wake of recent comments from IMO’s Frederick Kenney about the possibility of a postponement of the IMO2020 deadline “The chance is really zero. Procedurally, there is no mechanism that would allow the 0.50% regulation, as it stands right now, to change from 1 January 2020.”

There are still some questions over the use of open loop scrubbers which have been identified by the IMO as one of the several methods through which ships can meet lower sulphur emission standards.. Some of the main bunkering ports like Singapore and Fujairah have banned open loop scrubbers in their waters whereas some countries like South Africa have said yes to all types of approved scrubbers..

Then there are also the usage of bio fuels to power ships and shipments..

In what is termed as a first of its kind in the industry, a new carbon neutral product is being piloted by Maersk Line – the world’s largest container shipping line..

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No agreement on minimum speed requirements for ships @ MEPC74

minimum speed requirements - shipping and freight resource

224 days to go as of this post before #IMO2020 comes into effect.. I wrote recently about an open letter to IMO Member States by NGOs which states that the shipping industry must take appropriate measures to address climate change urgently..

As an initial step, these NGOs expressed their strong support for the IMO’s proposal to regulate ship speeds across various ship type and size categories.. In the letter, the NGOs said their preference would be to set maximum annual average speeds for container ships, and maximum absolute speeds for the remaining ship types, which take account of minimum speed requirements..

Of course, this was not welcomed by all, least of all by container carriers as it would result in them having to increase their fleet size to meet the delivery schedules imposed on them by the trade.. As per the carriers, this would defeat the purpose of trying to reduce GHG (greenhouse gas emissions) emissions..

The letter said that this regulation should be implemented as soon as possible and the obligation for compliance should be placed both on shipowners and operators, including charterers and called on all parties at the forthcoming IMO’s Marine Environment Protection Committee (MEPC74) to support this move..

Well, #MEPC74 has come and gone but there has been no agreement or deal on any of the proposals put forward to reduce GHG emissions..

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BIMCO elects its first female President

shipping and freight news

The Baltic and White Sea Conference was originally founded in Copenhagen in 1905 and is the world’s largest international global shipping association with more than 2,100 members including shipowners, operators, managers, brokers and agents..

The aim of BIMCO, as it is commonly known today, is to produce flexible commercial agreements and standard maritime contracts with clarity, consistency and certainty.. These include modern contracts tailored to specific trades and activities.. These contracts allow members to manage contractual risk..

BIMCO also works closely with many other influential organisations across the different parts of the maritime industry – from owners to operators, ports to ship builders, brokers to equipment manufacturers, and insurers to classification societies.. Such capability is crucial in developing the right environmental solutions for the shipping industry..

It is run by a board of directors and for the first time in 114 years, the President of BIMCO of the board will be a female – Ms.Şadan Kaptanoğlu..

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Do you support mandatory regulation of ship speeds..??

what is your opinion

As at the time of writing of this article, 244 days is what is left before ships have to comply with #IMO2020 (I actually put up a countdown on my sidebar)..

What IMO2020 is, has been discussed in detail across many articles on this blog, so I won’t repeat in great detail..

An open letter to IMO Member States by NGOs has expressed strong support for the IMO to implement mandatory regulation of global ship speeds differentiated across ship type and size categories..

Industry experts especially in container shipping seem divided on this.. Do you support mandatory regulation of ship speeds..??

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Hapag-Lloyd on track to achieve target of 20% reduction in emissions

shipping and freight news

Hapag-Lloyd has a container capacity of approximately 2.6 million TEUs including one of the largest and most modern fleets of reefer containers operated on the back of 120 liner services worldwide connecting more than 600 ports on all the continents..

Hapag-Lloyd is also one of the leading operators in the Transatlantic, Middle East, Latin America and Intra-America trades..

As per Hapag-Lloyd, their container shipping makes a significant contribution to a well-functioning global trade and as such bears a special responsibility for the environment, its customers and shareholders, and its employees..

In line with this, they have released their current sustainability report, titled “Gathering Pace Together”, which gives an insight into the broad spectrum of Hapag-Lloyd’s sustainability-related activities, which deals with topics such as combating corruption, employee training and data protection..

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