Shipping needs to be more efficient — Q&A with Dirk Vande Velde, Mediterranean Shipping Company’s Chief Sustainable Development Officer
This year’s Review of Maritime Transport, launched on 7 November, highlights that 2015 was another difficult year for the shipping industry, with continued overcapacity and historically low freight rates.
Following the report’s launch, we sat down with Dirk Vande Velde, chief sustainable development officer for Mediterranean Shipping Company, to discuss strategies for overcoming these challenges and for making shipping more sustainable.
Q: What has MSC’s strategy been to overcome the challenges facing the shipping industry, such as overcapacity and low freight rates?
A: Many analysts are saying that larger ships have led to too much carrying capacity in the industry, and that this is driving down industry earnings.
Q: But we see the challenge more from an efficiency perspective. How can we optimize our ships and trading routes?
A: One way is through vessel slot charter agreements between companies, to optimize available space on ships. We’re also limiting port calls so that we’re emptying and filling our ships as much as possible at each stop.
Q: What do these strategies mean for developing countries?
A: Optimizing our shipping lines on routes in Africa, Asia and Latin America means ports in these regions will have to improve performance, and this requires training and human skills development, but also bigger and more efficient terminals.
For some, like the Port of Lomé in Togo, this means new MSC investments in the container terminal, which will create jobs in the port and in activities connected to the port, like land transport and logistics. And the investments can boost the port’s attractiveness to industries looking to set up activities in Africa.
Optimized routes will cut overall transport costs, leading to lower prices on imports and exports for the benefit of consumers and producers. Take the cocoa trade for example — the cocoa season started last month in West Africa. Small farmers produce over 90% of the cocoa we carry. Lower transport costs for West African cocoa would make these small farmers’ crops more competitive on international markets.
Q: The COP22 meeting this week in Marrakesh has put the focus back on shipping emissions, since the sector is not regulated by the Paris Agreement on climate change. What is MSC doing to make shipping more sustainable?
A: Our efforts to reduce greenhouse emissions have focused on the key elements we control – the ships and the cargo.
Our newer vessels are built with G95 engines, for example, compliant with industry standards for fuel consumption that won’t come into effect until 2020-2025.
We’ve also fit 133 vessels with the necessary equipment to connect to onshore power networks, allowing them to shut down their diesel engines and generators when docked, cutting emissions to zero in the port.
For cargo, we’ve developed an automated stowage system to eliminate human error when stowing dangerous cargo, and to allow us to act immediately in case of an emergency. Our emergency response management system is fast and flexible and can reduce the impact on people and the environment.
This year we picked up the top award for greenest ship of the year at the International Green Shipping Awards in Rotterdam.
Q: How does MSC’s sustainability work benefit developing countries?
A: Our search for alternative energy supplies will benefit developing countries, many of which have great potential as producers of renewable energy like solar, wind and geothermal.
MSC offices around the world provide financial support and staff time to develop programmes in local communities, like sports programmes for underprivileged children in Brazil and early childhood development programmes in South Africa, for example.
And we have an apprenticeship programme for young people from underprivileged communities, which offer job opportunities after a three-year training period.
In the last two years we’ve developed over 115 training courses, made available to all employees, including those in our hundreds of offices in developing countries.
Q: What role do you see the United Nations playing in efforts to cut down shipping emissions?
A: We need reliable and independent data, and specialized UN agencies have an important role to play.
Right now hundreds of organizations are working on sustainability indicators for shipping, each with their own methodology, which at times can be incompatible. The UN could help standardize such indicators, to make sure we’re comparing apples to apples.
And organizations such as UNCTAD could use their meetings and publications to highlight practices that are having concrete results, and give them more visibility. For instance, the industry has, in our view, not given enough attention to the potential of shore power supply even though it can help cut ship emissions to zero within the port area. As I said, 133 of our ships are equipped, but many of the ports at which they call are not.