Sustainability target an uphill task for shipping sector: conference

Singapore, New Delhi — The shipping industry has a steep climb ahead to meet sustainability targets, and technology and data analytics could play a part, participants at the Digital Container Summit 2020 virtual conference said this week.

Shipping has a huge role to play in many of the sustainable development goals adopted by the International Maritime Organization and the industry has to take immediate actions on decarbonization and controlling greenhouse gas emissions, according to Wartsila Ventures director Steffen Knodt.

"I have identified certain areas and to go for 50% reduction of greenhouse gas emissions, there is a need to reduce about 85% of SO2 vessel and that is a very very ambitious target," Knodt said.

Operators can go for digital initiatives to find ways of curbing harmful emissions but they will need a huge knowledge base around propulsion systems, and fuel and emission tests.

With most of these tests and trials already available, it was a matter of who can adapt how fast, Knodt said, adding that the coronavirus pandemic has given a huge opportunity to the industry to reflect, reimagine and also reset the business in a more sustainable way.

In 2018, the IMO adopted sustainable development goals to reduce annual greenhouse gas emissions by at least 50% by 2050, compared with 2008, while, at the same time, pursuing efforts towards phasing them out entirely.

The goals are largely in line with those laid out by the UN.

Lars Jensen, CEO at SeaIntelligence, said the carbon neutral shipping targets for 2030 and 2050 were tough to meet through incremental steps, and that significant changes could be afoot.

"One of the aspects which is unknown right now is to which degree will the industry be subjected to a carbon tax," Jensen said.

"It appears increasingly likely that a carbon tax will be introduced in the not too distant future and that is right now unclear on how that will be implemented but it will carry with a cost and that cost will ultimately which will find its way to the supply chain."

Outside of that, some speakers said technology and a smart approach to supply chains could help drive sustainability goals.

"You do not want to have ships steaming at max speed, burning tonnes of fuel. You want them to steam at a speed which is economically and ecologically the best you can get," said Wolfgang Lehmacher, a supply chain and technology strategist, who was previously the head of supply chain and transport industries at the World Economic Forum.

That, Lehmacher said, was where technology could play a role in creating and supporting a smart and fluid supply chain.

"If shipping companies are able to predict a shipment is likely to arrive earlier, they could slow steam, save fuel for the ship," said Nidhi Gupta, co-founder and CEO of Portcast, which uses predictive analytics to optimize logistics chains.

Gupta said planning ahead to avoid port congestion, reduce truck wait times at ports, and increase the load factor of vessels could all support a more efficient supply chain.

However, Lehmacher noted that that far more was needed to take current trends in technology and shipping optimization to the next level, and drive sustainable shipping.

"Maersk said that automation and digitization has brought them probably 10% above market average. What we really need is a revolution -- in shipping we need alternative fuels. When we talk about urban logistics, we need urgently new models built on electricity," he said.

"Digitization takes us somewhere but, more so, we need clean supply chains."