Jonathan Spremulli, Principal Director and Head of the Marine Department at the International Chamber of Shipping, discusses the challenges and opportunities presented by the Fourth Industrial Revolution.
The World Economic Forum (WEF) has highlighted that we are entering a “Fourth Industrial Revolution.” The WEF founder Klaus Schwab clearly sets out that this fourth revolution will be fundamentally different from the previous three, which were characterised mainly by advances in technology. The underlying basis for the Fourth Industrial Revolution relates to the environment in which advances in “disruptive” technologies will affect the world in which we live and work, technologies such the internet, robotics, virtual reality and artificial intelligence.
Related advances in communications and connectivity continue to connect billions more people to the web.
This environment facilitates ever increasing connectivity between ship operators and their ships and between every ship and every port in the world at any time - this I believe will change the way we all do business. We have the potential to significantly improve the efficiency of our respective businesses and how we work together, which can at the same time protect the natural environment. By working together we can become more business efficient and also address the big issue that is climate change.
We in the shipping industry certainly do not operate in isolation and the Fourth Industrial Revolution has fundamental implications for the sector we steward.
One example is the development of Marine Autonomous Surface Ships (MASS).
In addition, the International Chamber of Shipping (ICS), whose membership represents 80% of the world merchant fleet, is acutely aware of the urgent need for all economic activities, including international shipping, to eliminate GHG emissions as soon as practicable. The sector has already delivered impressive CO2 reductions since 2008, something for which the shipping industry should be, and is, justly proud.
Improving the efficiency of existing ships is the “low-hanging fruit” in terms of lowering carbon emissions. The technical efficiency of ships has been improved hugely, partly as a consequence of the MARPOL regulation setting requirements for phased improvements in the designed energy efficiency of new ships (EEDI). Since the regulation was adopted by the International Maritime Organisation in 2011 the energy efficiency of new ships has improved more quickly and more deeply than was anticipated. Energy efficiency values of large container ships have already improved by over 40%, an exceptional achievement by the shipping industry.
“Ships, charterers and ports could significantly reduce emissions and delays, with consequential benefits for the environment and commercial performance, by collaborating even more closely to ensure successful just-in-time arrival and right-on- time departure of ships.”
As well as design efficiency improvements of new ships, shipowners and operators have also been working hard to improve the operational efficiency of all ships, by optimising speed, increasing digitisation of the industry and just-in-time arrival planning. With respect to ship operators, charterers and ports working together to address GHG emissions, just-in-time arrival is particularly pertinent. However, ship voyage speed optimisation, reducing CO2 emissions, can only work effectively if port arrival and berthing times are justified and reliable, so as to avoid unnecessarily high steaming rates simply to drop anchor on arrival, or bursts of high speed in response to a changed berthing slot. There is, therefore, a clear synergy between optimising the efficiency of ships and optimising the operation of ports. Ships, charterers and ports could significantly reduce emissions and delays, with consequential benefits for the environment and commercial performance, by collaborating even more closely to ensure successful just-in-time arrival and right-on- time departure of ships.
While short-term measures are important, ICS continues to assert that the IMO needs to move quickly onto considering the critical long-term measures that will help the industry to deliver the very ambitious target of a 50% total cut of GHG emissions by 2050, regardless of trade growth. This can only realistically be achieved with the introduction of commercially viable zero or near-zero CO2 emitting propulsion systems. The transition to zero CO2 emitting fuels – which ICS has dubbed the “Fourth Propulsion Revolution” – is the challenge of our age, and one that I know the shipping industry embraces. However, this is not something that shipowners can do alone. This will require a coalition of actors to enable an equitable transformation for the entire value chain.
Ports will play a pivotal role in this Fourth Propulsion Revolution, as it will be necessary to develop a new fuel supply infrastructure, including large-scale fuel storage and bunkering facilities. In the case of increasing electrification of ships, new shore power supply facilities will also be required to power the fleet. This may require new terminals for the import and export of zero carbon fuels as the global economy moves away from its reliance on fossil fuels. Indeed, some ports may be ideally positioned to benefit from the availability of plentiful renewable energy sources, such as solar or wind, to develop integrated clean fuel production and distribution capabilities and to benefit from new trade patterns caused by the transition to clean energy. Therefore we will need policymakers to provide leadership and support to enable an equitable and efficient transition to a zero CO2 emitting future.
According to climate science, the Fourth Propulsion Revolution will take place in the context of increased impacts of sea level rise and extreme weather events that will affect ship operations, which in turn will affect trade and balance sheets. We have a monumental challenge ahead of us, as both the Fourth Industrial and Fourth Propulsion Revolutions will impact the business models of all of us. But we also have a great opportunity. Too often change is cast in a negative light, but as we have seen from our history, previous propulsion revolutions have enabled the maritime sector to grow and positively enhance global trade.
“Too often change is cast in a negative light, but as we have seen from our history, previous propulsion revolutions have enabled the maritime sector to grow and positively enhance global trade.”
The reality is that the future goals are not arbitrary – change is coming – and such a fundamental shift will require a shift in the way the entire value chain operates. Ports and bunkering operations will have to change as well as the fuel production systems.
Financing the infrastructure shift will require different dynamics and honest engagement with policymakers and public alike.
We in the shipping industry have an opportunity to embrace the changes that are impacting the world, to chart a new course and to be a true growth asset for world trade.
The International Chamber of Shipping will be hosting a conference during London International Shipping week entitled “Setting Course for 2050: Powering Global Trade" on Thursday 11th September. Learn more at https://events.ics-shipping.org