From the Newsdesk: Revolutionary ideas, trade woes and a debt dilemma
Digitalisation and decarbonisation are still dominating the industry forums and don’t expect that to change any time soon. There are still many unanswered questions as we seek to revolutionse shipping’s next generation
Highlights from the Lloyd’s List Newsdesk this week include: Container shipping’s debate dilemma, our MEPC reporting, a podcast from Hamburg and lingering concerns over the long-term implications of the trade war
Discuss your ideas to revolutionise shipping
Big ideas, with hard cash to back up development programmes, are required across the industry right now. From digitalisation to decarbonisation – shipping is in urgent need of some long-overdue innovation and not just in terms of the hardware. In our ‘Ideas to revolutionise shipping’ series we offer up our thoughts on how to decarbonise, innovate and add value to shipping, but we ultimately argue that most of the big issues are not shipping specific at all. For all the current focus on emissions, the real innovation lies in finding supply chain efficiencies well beyond the scope of the vessel. Much of the innovation under way is less a thing and more a new way of doing things, but ensuring each new system is interoperable with both existing and new models requires collaboration along the whole supply chain and a level of data governance that has so far proved to be out of reach for many. These are all ideas that we will be discussing at Nor-Shipping in the Lloyd’s List Innovation Forum on June 3. Attendance is free, but space is limited so registering early is advisable. You can register for free here.
Time is not on the IMO’s side
Greenhouse gas emissions regulations will define shipping’s future (and much else besides), so it is inevitable that the focus on work at the International Maritime Organization is only going to increase. We were down at the BBC this week talking decarbonisation (you can hear our editor Richard Meade 49 mins into Tuesday morning’s World Update) and we were happy that this is now finally considered a mainstream business news issue. But judging by the progress made inside last week’s Marine Environment Protection Committee meeting (number 74, for those keeping count) they may need to reassess how they are going to tackle this problem and deal with that very real accountability. Agreeing the landmark goal to at least halve emissions by 2050 set the clock ticking last year, but we’re now back into the weeds of international diplomacy and it is by no means the only significant issue for the IMO to deal with. Our ace IMO reporter Anastassios Adamopoulos was inside the MEPC all week and his reporting reveals a worrying problem brewing. The IMO’s environmental regulators may have to reassess how they tackle these issues or risk making decisions that are vulnerable to internal and external criticism.
Digitalisation dominates, but beware container shipping’s debt dilemma
Digitalisation and IMO 2020 dominated the Global Liner Shipping conference in Hamburg last week. Both are set to remain at the forefront of container shipping for some while yet, as our guests on this week’s podcast made clear. Recorded on the sidelines of the conference our resident container shipping specialist Linton Nightingale chewed the fat with industry gurus Lars Jensen and Allan Murphy from SeaIntelligence Consulting and sum up nicely the main themes of our reporting from the event. In addition to the digitalisation and 2020 themes, liner service reliability, or indeed lack of it, also gets an airing. This is in addition to initial thoughts about the launch of the Digital Container Shipping Association, which will aim to get to grips with the host of new technologies available to the industry to speed and ease the flow of trade through standardisation. And while we’re talking box industry issues it would be remiss of us not to recommend that you read our coverage of container shipping’s debt dilemma. It’s a long read, but in a nutshell, new accounting rules mean that containership leases can no longer be recorded as operating costs and must be noted on the balance sheet. For some operators with large charter fleets, that has led to an increased debt burden. Required reading!
Trade war woes pile up in containers
Just in case anyone was in any doubt the trade war between the US and China is escalating. The fight will have an impact on shipping that is no less significant than the industry’s emission reduction targets and path to digitalisation. Some of the long-term implications are yet to realised, but we are already seeing evidence that increasing trade tension between the US and China has created uncertainty over the box charter market, raising doubts for those looking to IMO 2020 to provide much needed respite. Following a lacklustre peak season to date, in which time charter equivalents have flattered to deceive, owners were pinning hopes on a turn in fortunes in the months ahead as vessels are sent for scrubber retrofits. The latest announcement of US tariffs proposed for the beginning of June, when up to $30bn of Chinese products exported to the US will be subjected to 25% levies, has thrown another unwelcome spanner in the works. The initial effect will be minimal, but implications down the line are already worrying many. We recommend a read of our latest charter rate commentary to prepare yourself for what lies in store!