Are we closing in on a Volkswagen moment in shipping?

The haze from illegal fires in Indonesia yet again descended on Singapore and KL, so not much concern here with all those funky stories about the automotive diesel engines. Are you watching with interest all this chest beating about programmable deception shrewdly used by Volkswagen? I am still wondering how many buyers really bought VW cars purely based on the fuel consumption sticker, and not for reasons of sheer performance, comfort, and handling.

I still remember buying my first car eons ago and being advised by the sales rep working the new car lot to ignore the window sticker numbers and simply double them for day-to-day driving. So, why all this sudden drama in 2015? Especially, as the pundits are trying to say that Volkswagen would be all fine, if they only did not use the “green diesel car” advertising aimed at attracting a small percentage of “green”-biased buyers.

So why am I writing about Volkswagen and shipping? Well, aren’t we all exhausted of talking about “green ships”? Yes. Does anybody actually buy the ship that is “green” and believes they are buying an ecologically friendly ship emitting no pollutants? No, we buy vessels that theoretically burn less bunker on a voyage, not the ones that produce less toxins in the burning process. Since when the words “green ship” managed to masquerade themselves as “ecologically friendly”? Yet open any shipping journal, and you will only see advertisements for “green” ships taking advantage of “green” technologies, burning “green” fuel, and spewing out only “green” pollutants. Pure magic.

Well, I am pretty sure no journalist will look at chasing the shipbuilders about presenting themselves as constructors of “green” and taking them to task of actually proving that their vessels are “green”. Not nearly as sexy as chasing a major auto manufacturer and publishing front page pictures of the CEO committing self-sacrifice in public. No vessel owners discussing in 15 second TV clips launching class action lawsuits. No port cities or regulators in places like Hong Kong, Singapore, Rotterdam, hauling the shipbuilders in front of environmental commissions and investigations.

That does not mean that the industry needs to stand still. Strangely, for ideas we could also look to the auto industry. Just not to the manufacturers like Volkswagen, but instead to the pits of Formula 1. Yes, I know, it is counterintuitive to look to another polluting industry for ideas. But before you consider this an odd idea, consider this. Notwithstanding F1 drivers’ skills, every lap is done faster and more economically thanks to the ongoing symbiotic relations between the oil companies and the F1 car constructors. Tight cooperation like the one between Petronas and Mercedes, or Shell and Ferrari, leads to greater performance accomplishments on the track and under the hood of the F1 car. The research done by the oil companies has led to redesigns of the engines and gearboxes, benefitting the engines, the cars and … the drivers. Remember that every re-fueling stop decreases chances of winning. So, the research into the fuel forced the engine builders to become savvier about how the fuel is used. The result: the engines got cleaner and more efficient at the same time. At the same time, a rule that the fuel burned by F1 cars is the same as commercially available to all drivers around the world led to standardization across both industries.

Now, why wouldn’t it be possible for similar research to occur between designers of ship engines and researchers at the oil companies? True, a lumbering 15,000 teu container ship, or a 40,000 dwt bulker, are nowhere near the F1 car in the beauty department, but they pollute sea and land every day well in excess of those 11 million of diesel Volkswagens. A close research collaboration between engine builders and motivated oil companies would benefit humans and marine wildlife. Imagine giving a true meaning to a “green ship”. Not that such research does not happen today. But if we gave it a much bigger exposure, amplify its voice, and demanded the industries to show how that research works and what effects it produces for the benefits of the environment, we would be able to create truly greener shipping, than we pretend it to be today. And to prove a point? How about having our own form of a F1 race – line up 20 comparable ships claiming to be green and race them from Shanghai to Long Beach, while consuming minimal volume of fuel AND spewing minimal amount of pollutants.

What would the winner get apart from being kissed on the podium? How about a well-deserved glory of being the greenest vessel and probably a lot more shipments from the environmentally conscious shippers. 3-2-1. Go!

Kris Kosmala

Kris Kosmala is a partner at Click & Connect where he advises companies trying to leverage digitalization to change their business competitive position.


  1. Great article Kris. You’ve hit the nail on the head with your reasoning that most people buy a diesel VW for performance, comfort, and style rather than it’s “green” characteristics.
    Your F1 statement is also insightful, however in this case it’s also counter-intuitive because a lot of people are turning off F1 these days as their environmental regulations make for much more boring races. Previously, arguably the biggest excitement in F1 was the overpowering noise of these super engines being revved up to their limits. Now, most V8 sounds more like real engines than their F1 equivalents. This is one example where efficiency may actually kill the sport.
    Finally, I think a big issue here is the effectiveness of industry self-regulation. While no government or agency is performing due diligence on manufacturer and industry claims, you can bet your house on the fact that at least some will cheat the system. This also leads to significant R&D challenges, where a manufacturer’s view can simply be “why should I invest billions into new R&D when I can just claim to be able to do something and nobody will ever check it”. A better way would be to hold the entire industry responsible for their actions, forcing tighter controls.

  2. Hi Yuri.
    I agree with you that industry effectiveness will play a role, but until they sit down together and agree to pollute less, nothing will come out of that. And without benchmarking, the shipyards and the shipping companies can flaunt their green credentials by loosely interpreting the word “green”. The shippers will not be any wiser in that situation to discriminate between their shipping providers on environment friendliness grounds. As to industry self-regulation, I don’t think there is a solid example where, when it comes to protecting people’s health and well-being, self-regulation works well. You could see that only action by EPA brings polluters to heel, and inspections by FDA make you feel safe when you buy your medications, etc. In shipping, such role could be played by IMO (via independent subsidiary agency), but judging by their latest talk fest on “green” that recently took place in Singapore, we have to give up hope.

    As to the vroom factor, well, it would be great to hear it in my imaginary Shanghai-Long Beach race, but I will settle for silence too. And if you are not hearing the familiar vroom of the V8 in the F1 races, well, that’s because the current engines are hybrid V6. They pull the same power as V8, BUT save 50%+ of fuel (reducing pollutants) comparing to the old engines. Coupled with F1 enforcing the Kinetic Energy Recovery System KERS, it leads to further reduction of pollutants. If only IMO got the same sensibility as F1, the shipping would look a lot “greener” for real.

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