Lloyd's List: The Shipping Podcast

This episode of the Lloyd’s List Podcast was brought to you by Veson. Visit veson.com/decision-advantage for more information.

Ten years or so ago, when the University of Plymouth ran their first cybersecurity symposium, the number attendees barely made double figures.

This week, held in the main hall of the International Maritime Organization on London’s Albert Embankment, the same event attracted more than 300, from shipping companies in almost every sector.

Clearly, the topic has gained attention and traction, partly down to the repeated warnings of horror stories the industry continues to receive, right the way up to hackers being able to remotely control very large crude carriers.

There have been several high-profile cyber incidents in shipping since the devastating NotPetya attack which cost Maersk more than $250m in 2017.

The Port of Seattle, the Port of Lisbon and class society DNV can all count themselves of cyber attacks in the last two years.

But the apocalyptic vision that has been painted for the industry time and time again hasn’t materialised yet.

So, how worried should we really be about cybersecurity in shipping?

Joining Joshua on the podcast this week are:

Kevin Jones, professor of computer science and director of the Maritime Cyber Threats Research Group, University of Plymouth

Daniel Ng, chief executive of Cyberowl

Svante Einarsson, head of cybersecurity maritime for EMEA and APAC, DNV

Knut Ørbeck-Nilssen, maritime chief executive, DNV

When the International Association of Classification Societies (IACS) issued a paper in September setting out its position on the human element, its implications were clearly going to be far reaching. Its publication followed an IACS presentation in June to the Human Element Industry Group, which is made up of a number of maritime NGOs and it says that IACS’ aims “to highlight and emphasise the importance of … human element aspects when developing new IACS requirements applicable to the ship and ship systems.”

RINA’s Secretary General Roberto Cazzulo currently chairs IACS’ Council, giving the Italian organisation a particular significance in any discussion about its implications and, in this podcast, RINA’s North Europe Region Senior Director for RINA’s marine activities Fiorenzo Spadoni, puts IACS’ approach into context, saying that it reflected significant industry changes driven by digitalisation, decarbonisation and increasingly complex ship systems.

He also discussed whether these developments can help move the industry closer to net-zero emissions. “One critical factor in achieving net zero is the role of the human workforce” and by providing seafarers with skills and motivation to manage these technologies, “we are accelerating their adoption and the path toward net-zero,” he said.

The global climate circus heads to Baku, Azerbaijan this weekend for the start of the annual COP confab. That’s the Conference of the Parties, meaning signatories to the United Nations Framework Convention on Climate Change — or COP 29.

Shipping will be there, but don’t expect much in the way of headline conclusions this year. If there is going to be any progress from this meeting, it’s going to focus on the New Collective Quantified Goal on Climate Finance.

So why are we talking about COP this week?

The reality is that COPs have never really been about shipping, but what happens inside COP has a direct bearing on what happens next in terms of shipping’s long term regulatory future. This year specifically COP is taking place just six months before the International Maritime Organization sits down agree the economic and technical measures to hit the industry’s 2050 net zero targets.

What happens in COP has at least some bearing on what happens in the IMO and perhaps more importantly, shipping’s ability to make connections across the energy departments out in Azerbaijan over the next two weeks are going to be crucial to the process that follows whatever comes out of the IMO.

Shipping may not be a huge part of COP, but COP matters hugely to shipping.

Joining Richard on the podcast this week are:

Dr Tristan Smith, University College London

Katharine Palmer, Shipping Lead, UNFCC Climate Champions

Once a year, an industry alliance of first-movers and green investors gather in a room for shipping’s answer to Davos, the annual Global Maritime Forum.

And it’s always an interesting conversation.

These are shipping’s optimists. The progressive cohort of industry leaders who have collectively invested billions of dollars in decarbonisation projects and spawned voluntary projects advancing everything from transparent green finance and insurance to diversity programmes and climate-aligned chartering.

But it’s not easy being an optimist in shipping right now.

There are the obvious geopolitical headwinds blowing in of course, but there is also a growing sense that the industry in wait and see mode.

Shipping’s green first-movers are increasingly unlikely to move further without a sufficiently robust regulatory framework from the International Maritime Organization next year.

Scratch below the surface of the conversations about progress and innovation, and it’s apparent that we’re not yet at a stage where, even without the regulation, the industry is yet aligned on who ends up footing the bill for what is going to be a very expensive transition to green fuels and even basic efficiency investments.

And yet, despite all that, when the GMF gathered in Tokyo earlier this month there was a palpable sense of optimism in the room and genuine evidence that progress is not just possible, it is now inevitable.

So, has the shipping industry really moved from laggard to leader in the race to decarbonise?

Joining Richard on this week's episode are:

Eman Abdalla, global operations director ocean transportation division, Cargill

Laure Baratgin, head of commercial operations, Rio Tinto

Matthieu de Tugny, head of marine and offshore, Bureau Veritas

Nick Brown, chief executive, Lloyd’s Register

Arsenio Dominguez, secretary-general, IMO

Johanna Christensen, chief executive, Global Maritime Forum

There have been shipowners listed on Wall Street going back to the 1980s, but it was only in the mid-2000s – with the China trade boom – that the shipping industry really came to the US public markets in a major way.

In the two decades since then, there have been some controversies with these listed shipowners. These controversies have involved conflicts of interest: self-dealing by private sponsors and management to the detriment of common shareholders.

There have been cases of public owners buying ships from their private sponsors at prices that are – shall we say – advantageous to the related-party sponsors.

There have been fees paid by the public companies to their own sponsors for technical and commercial management at levels that have unduly enriched those sponsors.

There have been public company managements that have conducted highly dilutive equity sales, wiping out over 90% of their own share value to raise money to buy ships from their own private companies.

And there have been insiders that have had attractive offers to buy the public company – offers that would have enriched the common shareholders – but offers that were blocked because it was not in the interest of the insiders.

When it comes to corporate governance – the good, the bad and the ugly – there is one person who is considered the expert on this subject, equity analyst Michael Webber. He started his own firm, Webber Research, in 2019 and before that was the shipping analyst at Wells Fargo.

Every year, Webber puts out a scorecard that ranks shipping companies based upon their corporate governance and ESG practices. It is very closely watched – and this year’s rankings have just been released.

Webber joins Lloyd’s List senior reporter Greg Miller on this week’s episode to talk about the scorecard and what it tells us about shipping industry behaviour.

This episode of the Lloyd’s List Podcast was brought to you by Veson. Visit https://veson.com/decision-advantage for more information.

Some shipowners warn that crew supply is only set to get worse due to a lack of young people wanting a career at sea.

Others are concerned about the need to upskill existing crews to handle increasing digitalisation and multiple fuel types. This comes during a period of growth in the merchant vessel fleet due to a new shipbuilding cycle and limited vessel recycling.

Most industry insiders agree that the talent shortage is already becoming a serious problem for the industry. Meanwhile, the switch to recruiting shipboard personnel chiefly from the Indian sub-continent and East Asia since the 1980s means there are fewer people able to fill numerous western shore-based roles requiring previous seafaring experience.

As competition for crew has increased, more shipowners are taking action to increase the attractiveness of a seafaring career.

These include improved crew accommodation, better internet connectivity and more flexible, or shorter working contracts. All of these can be effective ways to reduce attrition.

So what more needs to be done to ensure a continued supply of skilled seafarers and attract young people to the industry to operate the global vessel fleet?

Joining Rob Wilmington on this week’s episode are:

Julia Anastasiou, chief crew management officer at OSM Thome

Raal Harris, chief creative officer, Ocean Technologies

THERE is a hint of clickbait about this week’s title – we at Lloyd’s List are of course very passionate about diversity in shipping.

But as the Women’s International Shipping & Trading Association celebrates its 50th birthday at its annual meeting in Cyprus – the question of why shipping still hasn’t achieved gender parity loomed large.

Female representation in board rooms is a societal problem, but shipping is lagging behind even those modest numbers.

The statistics are damning, wherever you get them from, but the accepted number is 15% of women occupy executive leadership roles and just 2% of seafarers are female.

This episode is not to preach about the importance of diversity. Frankly that isn’t up for debate anymore. Instead, it will ask why our sector is so far behind others in this matter and identify some actual, tangible tasks that we can all do to make a difference today.

Progress has undoubtedly been made, but it is slow and the going heavy. The exhaustion and frustration could be heard in many of the women’s voices at the conference, even if their words reflected continued optimism.

So why is shipping failing, and what actions can be taken now to right course.

Speaking on this week’s edition:

WISTA International President Elpi Petraki

IMO Secretary General Arsenio Dominguez

International Chamber of Shipping Secretary General Guy Platten

This episode of the Lloyd's List Podcast was brought to you by Veson. Visit https://veson.com/decision-advantage/ for more information.

There is a very detailed series of policy discussions happening right now inside the walls of the International Maritime Organization.

The question of whether the IMO can stick to its timetable and agree the basic architecture of shipping’s energy transition via a fuel standard and some kind of levy is of course important. It’s important in terms of demand signals to fuels producers, regulatory certainty for an industry in limbo, but it’s also going to determine whether we continue to have global regulation for shipping.

If what the IMO agrees is not ambitious enough, shipping still faces the likely proliferation of national and regional bloc legislations to come.

But what gets agreed inside the Marine Environment Protection Committee, is not the final step of shipping’s decarbonisation journey. It’s not even the starter.

There’s a long list of practical and political factors for shipping to consider beyond an IMO discussion, and the industry needs to be preparing itself for a gruelling series of changes over several years.

The bigger picture is that shipping is still not yet fully on the radar of the wider energy transition discussions like the Global African Hydrogen Summit that took place in Namibia last month.

There are still a lot of dots to be joined between government, ports, fuel suppliers and shipping as one of many industries in the queue for green fuels.

The industry is entering a phase that requires different approaches to its understanding of fuels supply and procurement and the coming regulation.

The cliché “it’s a marathon not a sprint” is overused.

But shipping is facing a decarbonisation ultra-marathon, and it needs to start training now.

Eric Christofferson is chief product officer at Veson Nautical, which is a provider of maritime data and freight management solutions to support global commerce.

In this sponsored edition of the podcast, he comments on how data is reshaping how shipping contracts and compliance are managed.

This episode of the Lloyd’s List podcast is brought to you by Lloyd’s Register — visit www.lr.org/en for more information

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