2023 has seen new regulations on efficiency and carbon intensity from the International Maritime Organization (IMO), and a continued focus on decarbonisation across the sector. The Carbon Intensity Indicator (CII) and Energy Efficiency Existing Ship Index (EEXI) measures, effective from 1 January 2023, require vessels to reduce their Greenhouse Gas emissions. These changes show how the shipping industry is becoming more regulated and accountable, and that decarbonisation is now an essential consideration for every stakeholder.
The industry needs to ask itself – what more can be done to reduce the carbon footprint of shipping?
Environmental regulatory changes
For port services providers representing vessels approaching the final mile of their journeys, this means focusing on what can be done to minimise emissions by fully optimising port visits. Ensuring that all paperwork is available and up-to-date where and when it is needed helps to avoid unnecessary delays. By cutting time in port, the prompt administrative action reduces the time a vessels auxiliary engines are required in port – therefore cutting emissions. As well as this innovation on current activity, there are additional services that may be supplied in port, such as connecting to cold ironing facilities as more of these systems come online and vessels are able to make use of them.
There is an increasing focus on overall emissions footprints and the need for better visibility of vessel’s carbon footprint when in port specifically. CII and EEXI have been set to better manage CO2 emissions, and we expect this trend to evolve in order to deliver a more sustainable industry in the future. Better managing emissions in port not only has global benefits, but port communities are also improved through better air quality.
The IMO has made it clear that these measures will ratchet up in the coming years. As this happens, operators will need to look at the bigger picture to consider how digitalisation can enable better management and measurement of a company’s operations and support decarbonisation progress.
Digitalisation in ports
Embracing digital change as an organisation can lead to significant operational benefits. Digitalisation is a key component of effectively managing data and creating insight for optimising operations. This includes reducing the time a vessel spends in port, decreasing the costs associated with any delays, and simplifying information sharing between key teams.
Digitalisation is also a key tool in decarbonisation as it helps deliver more efficient operations with fewer emissions, even before clean tech and future fuels are considered. A digitalised port agency with global coverage and scale will continue to make it easier for operators and cargo owners to manage port calls, confident that essential paperwork, port vendor coordination and payments are available on a timely basis.
The debate surrounding the optimisation of port services should be an important point on shipping’s agenda, which to date has been largely untapped.
S5’s use of data analytics has helped the agency to move from focusing on productivity alone, to delivering service and support that improves business sustainability for our customers. This was a core reason behind S5’s double-digit growth in revenue and profits in 2022 compared to the previous year, which included a significant expansion into the gas market.
The gas supply chain
A turbulent gas market in 2022 meant key players were looking for reliable partners to add stability to their own operations. Our portfolio of clients working in this sector continues to grow, which includes energy companies, cargo owners, terminal owners and ship owners fuelling their fleets with alternative fuels.
The continuing demand for gas in power and energy systems will see increasing volumes of gas transported via ocean-tankers. In 2022, close to 150 new LNG carriers were ordered over the year, while over the past year major carriers and traders, such as MOL and Proman, continued to announce additions to their methanol carrier fleets throughout the year.
Looking into the remainder of 2023, port calls involving gas carriers are going to increase significantly. More than a dozen new LNG terminals are planned in Europe as the continent turns away from gas imports via pipeline, and some terminals have come online – such as Lubmin where S5 is working with Deutsche ReGas. This change in the gas market and its supply chain will have profound effects on gas terminals and is reflected in the increasing number of gas carriers on order.
Tapping into talent
Historically, the shipping industry has had a nearly unique route, with many shoreside executives taking on their roles only after an extended period working at sea. As the shipping industry continues to modernise, learn from and adopt ideas from other industries, it becomes an attractive place to work for people who would never consider a career at sea. This is a positive occurrence, as new ideas and practices need new minds that are open to and welcoming of them.
At S5, with our extensive global team in 360 offices, we are keen to tap into this emerging workforce. As we continue to expand our global team, we see great enthusiasm and passion from young professionals who are further pushing the green agenda. ‘Traditional ways’ of working may affect a company’s ability to optimise their port services, so it pays to engage the interest of this digitally-native new generation and encourage them to embark on a career in shipping.
Although digital savvy and comfortable with new ways of working, it is important to remember that young professionals will not have the level of knowledge and experience of their more seasoned colleagues – and may not acquire it through the same route of direct experience. Operators will need to work out how to combine the expertise of experienced professionals with young professionals’ passion for sustainability for the good of their business.
Transparency will be the watchword for port agencies for the next few years. Agencies and providers of port services recognise that transparency – the ability for operators, shore staff and port authorities to have easy access to all the information, authorisations and data they need – will be central to the improvement of many important aspects of the shipping industry.
Being able to access the right information about port calls with ease, convenience and in a timely fashion will help operators to minimise dwell time and reduce emissions. It will allow operators to efficiently achieve just in time arrival and will mean businesses can have a better overview of the performance of their fleet when it comes to port calls.
Digitalisation will also improve administration of businesses, by reducing delays and inconvenience caused by mislaid information and paperwork. In addition, digitalisation makes it easier for operators to measure and compare performance of port calls across different locations, and so identify improvements to make their businesses more sustainable.
With S5’s capabilities and long-standing experience, we are acting as a transparent, sustainability solution for the ship owners. In today’s complex landscape, there is a need to focus on the value a port agency can create through supporting sustainability. As an agile, trusted and transparent port agency that can enable a Just-In-Time vessel arrival, quick departure and minimal emissions footprint, we are bringing added value to shipping’s ESG score.