Earlier this month, the US Coast Guard found the forty-year-old container ship El Faro on the seabed. The vessel sank during Hurricane Joaquin with the loss of 33 crew members. Shipping has learned from disasters for centuries, especially when lives are lost. The international sector views climate change as a ‘silent catastrophe’: it has yet to claim sailors’ lives, but shipping lines are focusing much more sharply on the environment and on working conditions.
Shipping companies that focus on reducing CO2 emissions and on crew satisfaction will be shipshape for the future.
Jan Raes Sustainability advisor
All hands on deck for sustainable shipping
Modernising working conditions and reducing the environmental impact of ships don’t come cheap. The maritime sector is in constant need of investment, some of it in green shipping technology and in good working conditions.
There are sharp variations at international level between the relative social and ecological performance of shipping companies. That’s not surprising, as opinions differ about what success looks like. When is internet access at sea fast enough? When is the cooking as good as home? When has the impact on the waterway or ocean been adequately reduced? When is there enough time and space for recreation? How does a shipping line prepare its fleet for limits on sulphur, nitrogen, CO2 and ballast water? And what will it cost? Do you, as a shipowner, want your vessels to be upgraded well in advance of tighter international regulations? Those who dare to ask these tough, practical questions in good time will be tomorrow’s winners.
Green ships are more profitable
Maritime entrepreneurs who concentrate on lower CO2 emissions and on the satisfaction of their crews are getting their firms shipshape for the future. It keeps them a step ahead of international legislation and their vessels competitive.
Researchers are studying the link between the environmental efficiency of ships, working conditions and crew training levels on the one hand, and the number of accidents on the other. Although the results aren’t in yet, you don’t need a crystal ball to predict that the better the social cohesion and operational efficiency on board, including fuel consumption, the fewer incidents there will be.
The human factor in shipping is huge. A better trained crew will follow operating procedures more effectively, while captains can easily reduce fuel consumption by five to ten percent by the way they operate their vessels. The link between environmental efficiency and accident levels is a little speculative, admittedly. Shipping companies and captains don’t control everything: they also have to deal with reckless third parties from time to time.
Sustainability via collaboration in the transport chain
Greater sustainability almost always means enhanced cooperation. Not only between shipping lines and shipyards, but also between hauliers, researchers, tech providers, classification societies, port authorities, financiers and governments. Shipping companies are focusing more and more on fuel bills: ships that look like oversized barges are giving way to more efficient designs.
Operating and capital costs are key
Focusing on fuel costs and the related investments has a direct impact on the work of shipbuilders and designers, for both new vessels and dry-dock alterations. Clean shorepower is an important development too. I talked to one shipping company that installed a series of solar panels because of the high cost per kWH in the port. This has enabled the firm to operate more cheaply while also using renewable sources.
The transition to hybrid engines is based on heat recovery systems and using batteries to add extra engine capacity. Tech providers play a big part in all this. The switch to gas engines brings environmental gains too, but also requires changes to the LNG bunker infrastructure. Offshore businesses in the gas and oil sector increasingly offer services geared to offshore wind. The challenge for financiers is to fund this shift to more sustainable means of production – an issue that is both gigantic and complex.
COP21 climate statement of the SSI
ABN AMRO is a member of the Sustainable Shipping Initiative (SSI), which brings together sector leaders whose activities minimise maritime pollution. These firms also want to be the best employers in shipping.
Maritime transport has quadrupled in the past twenty years. The SSI recognises the environmental impact of this, which is why its members are calling at the COP21 climate summit in Paris to step up efforts to cut CO2 emissions. The aim is to contribute to a scenario in which the earth heats up by no more than two degrees.
Ecological and social returns
Despite all these shifts towards more sustainable shipping, the momentum needs to be kept up. It doesn’t help much for shipping simply to declare itself the best pupil in the class based on its past efforts. With around 100,000 vessels in operation and emissions equal to Germany’s, there is plenty of scope for progress. At the same time, we shouldn’t forget about improving crew working conditions.
Ecological and social profit are best achieved in tandem: better trained crew members and safer working conditions are the first step towards getting the maximum benefit from green technology, while minimising accidents.