Charalampos Simantonis, President, Hellenic Shortsea Shipowners Association
Shipping industry faces a myriad of challenges during the last years. From the urgent need to decarbonize to the rise of digitalization, geopolitical tensions, labor shortages, and stringent environmental regulations, shipping companies must navigate these turbulent waters while maintaining their resilience and commitment to change.
One of the most pressing challenges for the shipping industry is reducing its carbon footprint. To achieve this, companies are exploring alternative fuels and propulsion systems. Hydrogen fuel cells, for example, offer a promising solution, as they produce zero emissions. Biofuels derived from sustainable sources are also gaining traction.
Additionally, the adoption of energy-efficient technologies, such as hybrid engines and advanced hull designs, helps minimize fuel consumption and emissions. Shipping companies are investing in research and development to find innovative ways to decarbonize their operations, ensuring a sustainable future for the industry but technology, research and development are in a premature stage, not to mention the definite lack of shore infrastructure. There are measures that can be taken to decrease a ship’s carbon footprint, such as slow steaming, retrofitting energy power limitation devices or propulsion improvement devices, voyage optimization, technological advances in ship design, nevertheless European Union forces new environmental regulations, while new technologies need more extensive research. Some of the measures adopted by the European Union are considered to be negative measures, as they increase the operating cost, making shipping transportation more expensive.
Additionally, the inclusion of maritime sector in ETS will prove out to be very expensive, due to the lack of alternative fuels. At present time the existing technology is not mature enough to support the sector.
Therefore, it becomes obvious that EU’s strategy should include fuel suppliers, together with shipowners to play a key role under the new system. Cooperation between the shipping industry and fuel suppliers is crucial to facilitate the energy transition of the sector and contribute to bridging the price gap between conventional fuels and sustainable fuels. Additionally, EU institutions must ensure that their policy decisions will oblige the fuel industry to invest in bio refineries and develop sustainable fuels for the marine sector.
Digitalization is revolutionizing the shipping industry, enabling companies to optimize operations, enhance supply chain visibility, and improve efficiency. The Internet of Things (IoT) plays a crucial role, connecting various devices and systems on ships, enabling real-time monitoring and data analysis. Artificial Intelligence (AI) algorithms help optimize routes, reduce fuel consumption, and improve safety. By embracing digitalization, shipping companies can streamline their operations, reduce costs, and enhance their overall resilience in a rapidly changing world. However, increased digitalization means the maritime industry will have to manage an increase in cyber risks. So, while digitalization can be used to improve safety, it also creates new positions of vulnerability. Thereby, it is necessary to conduct a careful evaluation of the cyber risks, their potential consequences and the best ways of preventing and mitigating them, to establish safety both onboard and offshore.
Moving to geopolitical tensions which, during the last years have unfortunately multiplied, we should highlight that they can disrupt shipping routes, increase costs, and pose significant challenges to the industry.
There is always a high risk that geopolitical tensions could lead to the fractionalization of trade blocks. This would limit trade and make it less efficient. Open dialogue and cooperation among nations are essential to maintaining stable trade routes and ensuring the smooth flow of goods. In order for shipping industry to navigate through geopolitical tensions and maintain its commitment to global trade, maritime sector should develop strong relationships with governments and international organizations.
Greek shipping industry faces a shortage of skilled labor, which can hinder its ability to adapt and innovate. It is essential to address this problem successfully, considering the importance seafarers arise for the industry. Shipping companies have been already investing in training and education programs, in order to develop their employee’s expertise and educate them about all new technologies and regulations. By partnering with educational institutions and offering apprenticeships, shipping companies can attract and retain talented individuals. Additionally, initiatives to promote diversity and inclusivity within the industry are being implemented, ensuring a diverse and skilled workforce for the future.
The shipping industry is no stranger to challenges, and the 21st century presents a unique set of obstacles that demand resilience and adaptability. The industry’s ability to innovate and collaborate will ensure its continued success and sustainability in a rapidly changing world. It is clear that resilience and commitment to change are the compasses that will guide the industry towards more sustainable future. Nevertheless, we should take into account that, in order to make the transition, the scale of cumulative investment needed between 2030 and 2050 to achieve the IMO target of reducing carbon emissions from shipping by at least 50% by 2050, is approximately USD 1-1.4 trillion, or on average between USD 50- 70 billion annually for 20 years.
Banks and financiers are starting to invest in sustainable shipping but a large funding gap remains. There has been a lack of finance for shipping since the financial crash when traditional banks retreated from the market. Therefore, for maritime sector to be able to achieve green transition it is essential to think out of the box concerning traditional funding and develop new financing tools available to maritime sector.
