Technology, geopolitical uncertainty and environmental regulations will force change throughout the shipping industry

LONDON, 12 September 2019 – Global law firm Reed Smith yesterday hosted a panel of shipping experts to discuss the issues having the biggest impact on the maritime industry.

As part of London International Shipping Week, representatives from a cross-section of the industry took part in a lively debate on international trade and the wider industry including technology, environmental issues, sanctions and geopolitical uncertainty.

The panel members who took part in the event at Reed Smith’s Broadgate Tower offices in Shoreditch comprised:

  • Nick Shaw, executive officer of International Group P&I and former global head of shipping at Reed Smith.
  • Martin Stopford, president of Clarkson Research Services Limited and director of MarEcon Ltd.
  • Admiral Sir George Zambellas GCB DSC DL, former First Sea Lord and apprentice and engineer by training, with transformation leadership expertise, especially in the delivery of breakthrough innovation performance.
  • Leigh Hansson, Global Regulatory Enforcement group partner and a leading lawyer in Reed Smith’s International Trade and National Security team.

Panel moderator and Reed Smith partner Sally-Ann Underhill introduced the first topic of discussion – technology. The panel’s consensus was that technology has the potential to significantly change the shipping industry but it is still some way from the ‘inflection point’ i.e new technology is not yet transforming the industry.

The collective view from the panel was that big data is likely to be a key driver of any change but shipping companies will need to collaborate in order to standardise and ensure the quality of the data. Without this collaboration the sector is at risk of disruption from new players that are far more advanced in their use of technology.

The ‘green agenda’ and environmental regulations were also key topics of the panel discussion. It was broadly agreed that the shipping industry is reasonably prepared for IMO 2020 but the true test will come when the new regulation comes into force and it is able to understand how various jurisdictions are going to approach enforcement.

The panel also addressed the changing geopolitical situation and its impact on the shipping industry. In particular the US-China trade war was said to be a force that might result in a reshaping of trade flows.

Underhill said: “The industry is facing a somewhat unprecedented time of change. Technology has the potential to revolutionise the industry, the current geopolitical landscape and rise of protectionism is redirecting trade flows and the green agenda are all forcing change. Shipping organisations need to be sure they are compliant with current and emerging legal frameworks as they look to address these challenges and opportunities.”

The current sanctions landscape was also discussed, with advice coming from Reed Smith partner Leigh Hansson that ship owners and managers need to be carrying out sufficient due diligence in order to not breach, in particular, the US sanctions regime.

Hansson said: “OFAC is putting a greater onus on the shipping community to know who they are doing business with. It needs to be aware of the warnings that OFAC is publishing but also keep abreast of information available in the public domain – it cannot simply rely on the information coming from the agency. Ignorance will not stand up against the strict enforcement approach taken by the US.”

Reed Smith’s Transportation Industry Group would like to thank Nick, Martin and George for joining the panel and sharing their views on the future of the shipping industry.

Baltic Exchange launches new ship operating expenses assessment

The Baltic Exchange has launched a new assessment to track the cost of operating vessels. Initially covering a range of dry bulk vessels, the service will also be expanded to tankers and other sectors.

The Baltic Operating Expense Index (BOI) will be published quarterly and based on assessments from three leading independent third-party ship management companies: Anglo-Eastern, Columbia Shipmanagement and Fleet Management. Collectively they manage a fleet of over 1,800 vessels. Additional companies are expected to join the panel in the future and a residual price calculation added later this year.

Baltic Exchange Chief Executive Mark Jackson said:

“The Baltic Operating Expense Index is intended to provide transparency to the fluctuations in running costs. Daily operating costs are one of the variables used by shipping investors to calculate the profitability and residual value of their assets. We already provide independent freight, sale & purchase and recycling assessments. With the addition of operational expenses assessments, shipping investors now have a complete toolkit to manage their risk and aide their decision process.”

Each panel member will submit four numbers, expressed in USD per day. Three will be combined to produce the BOI:

  • Crew (USD per day, including all fees)
  • Technical ((USD per day, including all fees)
  • Insurance (USD per day, including all fees and rebates)

The fourth, an assessment of a five year Drydock cost, will be amortised over five years to give a USD/day price, but published separately and will not contribute to BOI.

Assessments will be provided quarterly. Q4 2018 and Q1 and Q2 2019 assessments are available following a recent trial. Q3 2019 assessments will be published on 17 October.

The assessments will be available on to subscribers to Baltic Exchange market information services.

The vessels initially assessed are:

Capesize: 180,000 mt dwt built in “first class competitive yard”, 199,000cbm grain, LOA 290m, beam 45m, draft 18.2m SSW. Not ice classed, not scrubber fitted, 5 years old & special survey passed.

Panamax: 82,500 mt dwt built in “first class competitive yard”, 97,000cbm grain, LOA 229m, draft 14.43m. Not ice classed, not scrubber fitted, 5 years old & special survey passed.

Supramax: 58,328 mt dwt on 12.80m draft SSW built in “first class competitive yard”. LOA 189.99m, Beam 32.26m, 72,360 cbm grain, 5 holds/hatches, 4 x 30mt cranes with 4 x 12cbm grabs. Not ice classed, not scrubber fitted, 5 years old & special survey passed.

Handysize: 38,200mt dwt at draft 10.538m SSW, built in “first class competitive yard”, 47,125cbm grain, LOA 180m, beam 29.8m, 5 holds, 5 hatches, 4 x 30mt cranes. Not ice classed, not scrubber fitted, 5 years old & special survey passed.


ABS Supports Amver Awards Honoring UK’s Commitment to Saving Lives at Sea

(LONDON) ABS continued its long-standing backing of the Amver Awards by sponsoring a ceremony recognizing the contribution of UK shipping to the unique reporting system supporting search and rescue efforts for those in distress at sea.

The awards honored 397 UK managed vessels from 54 companies for their commitment to maritime safety, making themselves available to assist in search and rescue activities anywhere in the world.

“The Amver awards recognize the seafarers who operate the global fleet and bravely assist people in peril at sea. They also honor the companies who make safety a priority,” said David Davenport-Jones, ABS Director, UK Business Development. “ABS is proud to support all of their efforts, which align closely with our own safety-focused mission.”

Benjamin Strong, Amver Director, said: “There is no nation more keenly aware of the importance of the seafarer than Great Britain. Amver participation from ships from the United Kingdom and those flying the Red Ensign are critical pieces of Amver’s global search and rescue capability. Whether these ships are rescuing those in distress, searching for suspected emergencies, or simply reporting their locations in the event of an emergency, these crews and companies represent the best of what shipping has to offer and the United States Coast Guard is grateful for their cooperation.”

Amver – Automated Mutual-Assistance Vessel Rescue System – is an international voluntary reporting system sponsored by the United States Coast Guard and used worldwide by search and rescue authorities to arrange for assistance to persons in distress at sea.

About ABS

ABS, a leading global provider of classification and technical advisory services to the marine and offshore industries, is committed to setting standards for safety and excellence in design and construction. Focused on safe and practical application of advanced technologies and digital solutions, ABS works with industry and clients to develop accurate and cost-effective compliance, optimized performance and operational efficiency for marine and offshore assets.

DNV GL: Flexibility is the key as shipping transitions to a lower carbon future

London, 11 September 2019: DNV GL – Maritime has released the third edition of its Maritime Forecast to 2050 at London International Shipping Week 2019 (LISW). The Maritime Forecast examines the future of the shipping industry in a rapidly changing global energy landscape. This year’s report focusses on the challenge of reducing the carbon intensity of the global fleet to meet the ambitious targets set by the IMO’s greenhouse gas reduction (GHG) strategy.

 “Existing technology can deliver the future we desire – including meeting the 1.5°C target set out in the Paris Agreement,” said Remi Eriksen, Group President and CEO of DNV GL. “So far, support for the energy transition has been too sporadic. We need a broad and coordinated policy agenda that supports new technologies as they emerge and sustains that support through the build-out phase.”

A combination of external market pressure and the ambitious direction set by IMO means that the challenge of decarbonization has been laid squarely on shipping’s doorstep. To answer the question of how shipping will rise to meet the challenge, this year’s Maritime Forecast examines how the world fleet measures up in terms of decarbonization and looks at different strategies and pathways the industry can take to reach this goal.

The Maritime Forecast to 2050 analyses three regulatory scenarios (continuing under current policies, regulations becoming gradually stricter, or very strict regulations introduced towards the end of the 2050 deadline) and how these could affect the transition to low and carbon neutral fuels. Improvements in general energy efficiency in on-board operations is also included as an essential part of reducing emissions.

“One of the key components to meet the decarbonization challenge is fuel flexibility, as the fuels of today may not be the fuels of tomorrow,” said Knut Ørbeck-Nilssen, CEO of DNV GL – Maritime. “This means having a picture of the entire fuel ecosystem is vital, as owners, operators, and the industry itself will have a much tougher time adapting to a low-carbon future if they are locked into a single choice.”

Fuel flexibility and technologies to bridge changing fuel usage have been identified in the Forecast as essential strategies for both individual owners and the shipping industry to adapt to the energy transition and prepare for a low carbon future. In the deep-sea segment especially, dual-fuel solutions and alternative fuel “ready” solutions could smooth this transition, by laying the groundwork for a future retrofit. Combined with bridging technologies such as adaptable storage tanks, onboard systems and shore-side fuel infrastructure, this could give the industry more options as new fuels and technologies emerge.

“Ships built today will have to compete with vessels coming onto the market in five, ten or 15 years’ time, and must consider future standards to remain competitive,” said Knut Ørbeck-Nilssen. “Considering the uncertain future that lies ahead, failing to be future-proof in the newbuilding phase could lead to that asset being stranded in the not so distant future. In addition, CO2 emissions could become an important rate differentiator and we have already seen forward-looking charterers start down this road.”

The Forecast shows that the uptake of low-carbon and carbon-neutral fuels is essential to meeting IMO GHG goals, with carbon-neutral fuels having to supply 30–40% of the global fleet’s total energy by 2050. Under different regulatory pathways, however, the model predicts that a variety of fuels could come to the fore. In all of the pathways, liquefied methane (from both fossil and non-fossil sources) provides a large part (40–80%) of the fuel mix at 2050. The Forecast also suggests that in the deep-sea sector, ammonia, biodiesel, liquid biogas and electrofuels are promising carbon neutral options, with battery, hybrid, and hydrogen solutions being potential options for the short-sea segment.

The ongoing energy transition is starting to reshape the shipping industry, with much uncertainty on the way to 2050. DNV GL’s Maritime Forecast to 2050 hopes to offer the industry a vision of the changes ahead, offering guidance, highlighting trends, and providing valuable insights for maritime stakeholders. The Maritime Forecast to 2050 is part of a suite of Energy Transition Outlook (ETO) reports produced by DNV GL. The ETO has designed, expanded and refined a model of the world’s energy system encompassing demand and supply of energy globally, and the use and exchange of energy between and within ten world regions.

You can download the full Maritime Forecast to 2050 here:

Inmarsat landmark study identifies critical role for maritime startups

New study commissioned by the Inmarsat Research Programme and conducted by PUBLIC shows the key role startups and connectivity will play in driving maritime industries along the road to digitalisation.

New study commissioned by the Inmarsat Research Programme and conducted by PUBLIC shows the key role startups and connectivity will play in driving maritime industries along the road to digitalisation.

10th September, 2019: New and original research into maritime startups conducted for Inmarsat by UK GovTech venture firm and research house, PUBLIC, concludes that more bandwidth connecting ships to shore at lower cost than ever before is empowering a new breed of single-minded innovators to bring the true benefits of digitalisation to the shipping and offshore sectors.

The report, ‘Trade 2.0: How Startups are driving the next generation of maritime trade’, co-authored by Nick Chubb and Leonardo Zangrando, locates the maritime sector at an inflection point; open to big data, blockchain, artificial intelligence (AI) and cloud computing, at a time when emissions regulations are pushing it away from the fossil fuels that have framed its business model.

Estimating that the Ship Technology (ShipTech) market is worth US$106bn as a whole today, the report predicts its value rising to US$278bn by 2030. Significantly, in what represents the first ever market value estimate, it goes on to predict exponential growth for maritime startups. The projection is based on direct input from 100 startups and two years of tracking 240 active startups by the authors’ database of maritime innovation.

The report says that, in 2018, just US$4.2bn (£3.4bn) of digital spending went to startups and small innovators, with the rest going to corporations that also sell operational technology and hardware. However, as barriers to consume digital services at sea come down, the total spending on digital services from startups and small to medium sized enterprises (SME) will rise to over $111bn by 2030, representing a compound annual growth rate of 120%.

Welcoming the research, Ronald Spithout, President Inmarsat Maritime says: “These are exciting results for our industry, showing that startups and investors should see maritime as offering significant market opportunities for the next ten years.” The findings also align closely with group investments and Inmarsat’s role as an enabler of maritime digitalisation with close to 7,500 VSAT installations completed, says Spithout. In 2019 alone, Inmarsat has launched the shipping industry’s first Internet of Things (IoT) platform (Inmarsat Fleet Data), added partners to its Certified Application Provider programme, worked with startups through the Inmarsat Digital Incubation scheme and backed two high profile maritime accelerator programmes.

Inmarsat has joined forces with startup programmes Rainmaking Trade and Transport Impact (T&TI) and Bluetech Accelerator, which support the potential of the IoT in maritime, ports and the supply chain. Inmarsat seeks to help innovators find a route to market via the high-speed Inmarsat communications infrastructure that connects over 160,000 vessels, ports, road and rail networks worldwide.

The new report indicates that maritime startups raised nearly $200m in venture capital investment in 2018, just four years after the creation of the world’s first accelerator dedicated to the sector. Last year, 25 programmes existed, with 226 startups collectively ‘graduated’ to date.

Also featured are case studies of startup solutions to enhance ship and port operations, and ship management. These include drone-based remote inspection from RIMS BV, approved by nine class societies, and the automated crew travel system from C Teleport.
Inmarsat also highlights the fact that several of the standout innovators are UK-based. These include: Workrest, a smart crew logger of rest hours for any device, to ensure compliance; Green Sea Guard, a sensor-in-funnel plus reporting solution to verify emissions compliance; the HiLo solution to reduce risks by recording, analysing and feeding back data on ‘high frequency, low impact’ incidents to ships; and the constantly updated and voyage-specific BunkerEx pricing portal.

“As this important report shows, it is more important than ever for startups, corporate suppliers and ship operators to collaborate,” says Spithout. “We’re championing open innovation, collaboration and partnership, and reaching out to identify opportunities to co-research and co-create new digital products with external innovators to serve our existing customers and open up new markets. Exciting new collaborations with some of the start-ups covered in this report are bringing game-changing digital products to the maritime industry.”

The report is available to download at

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