Shipping – responsible for transporting 90% of the world’s trade - the vital link needed to support livelihoods amidst communities and global supply networks – is increasingly exposed to pressures and risks of highly consequential disruptions in service.
The race for decarbonization, digitalization, the climate change crisis, combating maritime cyber-attacks, geopolitical tensions, ambiguous sanctions and environmental regulations, labor shortages ...the list of ‘disruptors’ in shipping which call for our resilience and adaptation, seem to be endless.
The Covid 19 era saw many seafarers stranded on board their ships due to extended lockdowns -which were never ending.
Many ports around the world , while taking the goods they brought, banned seafarers from going on land. By Aug 2022, the seafarer situation had improved and many ship workers were repatriated thanks to the efforts of International organizations around the world. Russia’s invasion of Ukraine in Feb 2022 and the avalanche of sanctions which followed, was the next major shock in recent years which forced us to adapt very quickly. Seafarers once again remain stranded but for different reasons – on board 61 vessels
berthed in Ukrainian ports on the Black Sea and Sea of Azov - the International Chamber of Shipping ( ICS ) and UN are advocating for an urgent solution.
The latest war in Israel and Gaza presents new challenges which could mount to heights so horrific – the impact of which will be well beyond what we have seen until now. The ICS has called for the protection of innocent seafarers after Red Sea attacks and urges influential states to help end targeting of ships.
Beyond the geopolitical tensions we are facing in the surrounding areas and although the maritime sector is responsible for 3% of the global annual emissions, our industry has made important strides toward decarbonization –at the cost of various unknowns, bureaucratic deadlocks and overall uncertainty. At the start of the new year, voyages will be subject to a floating tax on carbon emissions where vessel operators will essentially have to pay for the right to pollute. Shipowners and operators are looking into buying ‘carbon credits’ or EU allowances as they will be called - enabling their vessels to carry out voyages – but it is unclear whether all shipping companies will be able to make use of these carbon credits. EU emissions trading will entail various contractual implications for shipping.
The CII certification regime in force since Jan 1st, 2022 -one of the two decarbonization measures agreed at the IMO’s 76th Marine Environment Protection Committee [ MEPC76 ] IN July 2021 – the second measure, the EEXI or Energy Efficiency Existing Ship Index – require parties to work in synergy to achieve compliance through increased collaboration and sharing quality data. From 2024, ships will receive their first CII rating from A to E ( with A being the highest and E being the lowest ) based on their emissions from 2023. The IMO’s intention being the emission rating thresholds to become more stringent as we get closer to 2030 – in order to attain the 40% IMO emission reduction target. As the situation stands, the CII calculation is a huge headache for shipowners due to its failure to address some of the practical commercial realities that vessels face. The responsibility for compliance falls primarily on the shipowner unless that responsibility can be assumed by the char- terer. A negative CII rating as can be appreciated, will render the vessel non-sailable and uncharterable, triggering a snowball effect with drastic economic, legal and commercial repercussions.
Gibson Shipbrokers warn that a vessel’s CII rating can be manip- ulated trough its trading pattern by assigning the vessel to longer distances to average down the factors over mileage – Newer ves- sels are operated on shorter haul voyages because of their greater efficiency thus will have a higher CII rating ; while less efficient ships which would have a lower CII ranking could improve their performance by operating longer distance – which in turn would result in higher CO2 emissions [ as they are sailing longer trips to average down their CII score ].
Biofuels are currently the easiest way for shipowners to reduce carbon emissions from their existing ships via the use of alternative fuels and given the ever increasing surge of new regulations, ship- owners’ incentive for using biofuels continues to increase with cost being the major deterrent. Furthermore, the increased demand
for alternative fuels signals the potential threat of shortage – it will become all the more challenging to secure the fuels we need. The race to decarbonization is a long and winding one – again im- pelling us to adapt, by working together to find commercially viable ways to be sustainable and avoid further unintended conflicts and consequences in the future.
If the above is not enough, in today’s world, it is not adequate to be secure – we need to prove we are secure on a daily basis. With the ever increasing digitalization in all aspects of our infrastructure, cyber criminals seem to be a step ahead. Sept 11th cyber-attack on Ceasars Entertainments and MGM Resorts brought to light a new method of attack- impersonating an employee on Linkedin in
a call known as vishing [ ‘voice’ plus ‘phishing’ ] to MGM’s IT help desk. Via vishing, hackers gained login credentials to bypass multifactor authentication and enter the system. Industry lead- ers have had to gain cybersecurity insights and fast. The problem is that effective solutions are often affordable only by Fortune 1000 companies which is why large companies rarely get hacked. Small to medium size enterprises ( SME’s ) are easier targets because they lack comprehensive security solutions. The maritime industry is committed to fighting this ‘dark’ threat by doing its utmost to protect its infrastructure by implementing processes that protect and prevent various types of cyber threats.
In spite of all of the above mentioned shocks and stresses, whether they are related to climate hazards, geopolitical uncertainty, technological change, decarbonatization efforts or other unpredictable phenomena - shipping has resilience in its core. For years leading up to the Zero emission targets – shipping companies have been working extremely hard not only to build their own resilience via building ships with new technologies that reduce fuel consumption, diversification and new opportunities carrying less risk etc but also ensuring that actions are taken to enhance the resilience of the maritime sector as a whole. Through coordinated efforts across all shipping stakeholders, our aim continues to build our resilience by 2030, bringing us close to ‘a complete transformation by 2050’. However during this transitional period plagued with obvious inse- curity, I would like to see more transparency ; without wanting to sound offensive or negative, I perceive an element of hypocrisy in the goal of zero emissions that we are meant to achieve. The Zero Emissions target by 2050 is realistically not attainable - this is the view of leading technical authorities which I tend to agree with; After all, we can’t ‘build Rome overnight’.
Amid the global, very often unpredictable turmoil, all we can do,
as Navios’ CEO Angeliki Frangou has been quoted as saying, is to focus on what we can control. Equipped with our values, perseverance, common purpose and passion, the right synergies, we need to go beyond adaptation, ; we need to engage with all stakeholders in the maritime supply chain to create the right plan and adopt the best solutions for a sustainable environmentally and commercially viable future.
I would like to leave you with the riveting words of His Majesty King Charles III at the COP28 opening ceremony which took place on Dec 1st, 2023 in Dubai : “In 2050, our grandchildren won’t be ask- ing what we said, they will be living with the consequences of what we did or didn’t do. If we act together to safeguard our precious planet, the welfare of all our people will surely follow. We need to remember too that the indigenous world view teaches us that we are all connected – not only as human beings – but as all living things and all that sustains life – as part of this grand and sacred system. Harmony in nature must be maintained;”
“The earth does not belong to us – we belong to the earth”.
* Principal – TSAVLIRIS SALVAGE GROUP