Global shipping: Looking ahead and astern at the start of a challenging year
USUALLY, at the turn of the year, my inbox is full of New Year messages from the great and the good of the global shipping industry. Perhaps I have fallen off a few distribution lists, but it feels like fewer of the industry’s top people have so far given their take on the prospects for the coming year.
That could be because many in the industry are scrambling to deal with the ongoing crisis in the Red Sea, which is now causing significant disruption to supply chains. Indeed, the three biggest bodies representing shipping – the World Shipping Council, the International Chamber of Shipping and Bimco – have issued a joint statement thanking the 12 nations that have condemned “illegal attacks on ships in the Red Sea and unlawful detention of vessels and crews there”.
The shipping associations have called on “all nations and international organisations to protect seafarers, international trade in the Red Sea, and to support the welfare of the global commons by bringing all pressure to bear on the aggressors so that these intolerable attacks cease with immediate effect”.
That threat does not appear to have ceased yet, despite the presence of a significant number of warships off the Yemeni coast. Arsenio Dominguez, the secretary-general of the International Maritime Organization (IMO), made a speech to the United Nations Security Council a week ago, highlighting that attacks against international shipping in the Red Sea area “are not acceptable”, and that “ships must be allowed to trade worldwide unhindered and in accordance with international law”.
The Red Sea crisis is set to continue – and no doubt will feature all too frequently in this column – but Dominguez, who has only very recently taken up his post, also used his New Year message to stress positives from last year. He observed that now is the time of the year “when we look back in reflection and excitement on the things that we have done, the things that we could have done, and the things that we’re yet to do”.
He asserted: “Here at the IMO, we have a great trajectory of successes. But of course, we can always do more. I don’t need to tell you how vital the shipping industry is for the world. And the IMO has done much to support its member states, seafarers, the industry and everyone who lives on the planet.”
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He gave a few examples of the IMO’s recent achievements. During the Covid pandemic, the IMO “supported hundreds of individual cases of seafarers (requiring assistance)”. Yes, it did, but the way seafarers were treated around the world by IMO member states during the pandemic – with a few notable exceptions – is not something to be particularly proud of.
The IMO chief also noted that the UN agency had “greatly reduced accidents on ships in comparison to the 1990s”. Broadly, that is true, though that seafarers are still dying in all too frequent enclosed-space incidents and accidents during lifeboat drills is shameful.
Last year, the IMO agreed on a strengthened strategy to achieve net-zero greenhouse gas emissions.
Dominguez asserted: “With the introduction (of a global sulphur cap) in 2020, we greatly increased air quality, and now we have a trajectory for the decarbonisation of the industry.”
That statement unintentionally highlights the complexities of dealing with environmental issues. Greatly reducing the sulphur content of marine fuel can be said to improve air quality and thus human health. On the other hand, recent research has tended to confirm concerns that reducing sulphur particulates in emissions has, at least to a small extent, increased global warming.
Dominguez concluded on an upbeat note: “With me as the 10th secretary-general, I welcome you to join us in an era of progression for the organisation, (which) leads by example and with higher values from inclusion, diversity and transparency. I look forward to working with you for the years to come into a new and exciting era to make this maritime sector a much better one.”
Those are sentiments I imagine most of us will share. The goal I would like to see prioritised is increased transparency and, in particular, much better reporting of investigations into accidents. As Dominguez said: “We can always do more.” Actually, the IMO must do a lot more.
Finally, I must mention the practical advice coming from “K” Line president and CEO Yukikazu Myochin in his New Year message: “Plant your feet firmly on the ground, think things through, and act swiftly.”
Sadly, Myochin had to start his message with condolences to the families of those who lost their lives in Japan’s terrible earthquake on the very first day of 2024. He went on to give one of the most succinct and, in my opinion, accurate assessments of what shipping is up against right now.
He said: “Looking back on the past year, we have been shocked by the news reported daily in the media, such as the extremely challenging situation in the conflicts between Israel and Palestine, as well as the prolonged conflicts between Russia and Ukraine. We sincerely hope for the early realisation of peace through international solidarity and cooperation.
“These increasing geopolitical risks and their impacts on the supply chain have the potential to jeopardise the freedom and safety of navigation, which is the foundation of international maritime transport. The global economy has increased the degree of uncertainty surrounding the business environment (through) rising inflationary pressures, the tightening of monetary policy in countries around the world, and the impact on the Chinese economy of the real estate downturn.”
I think that pretty much covers the challenges. The “K” Line boss observed: “A careful response and attentiveness are required in business operations.” An understatement, perhaps; nevertheless, it’s a good way to put it.
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