Shipping needs a new narrative inspired by an innovative, collaborative and inclusive approach to the challenges of global logistics in the modern world, writes Gavin Lipsith.
The humble tinned salmon – caught in Scotland, processed and packaged in Asia then sent back to be sold in Scottish shops – has long been held as an example of an increasingly interlinked global supply chain. But there was always an element of the absurd about the journey, just a hint of exploitation and the distinct pong of noxious gases emitted along the way. In today’s world, how that miracle of logistics is conducted threatens to undermine the long-term viability of shipping.
That threat, and how it might be averted, was one theme of a recent panel discussion hosted by Yara Marine Technologies and law firm Wikborg Rein. Setting the scene for a conversation on ‘a century of change’, Yara’s chief sales officer Aleksander Askeland noted that shipping had grown faster than gross domestic product for (more or less) the past hundred years. “I don’t think that can continue in quite the same way,” he said.
Is Aleksander part of a nefarious anti-growth coalition seeking the stagnation of shipping? No, but he is one of a growing group of observers – including the Nobel Prize winning economist Joseph Stiglitz from the Nor-Shipping stage this year – to recognise that the long-range forecast for shipping could be bleak without structural change. The socio-economic impacts of recent supply chain disruptions, surging protectionism tied in part to a desire for food and energy security, and the environmental impact of long-distance logistics all point to an impending moment of reckoning for maritime business as usual.
The industry is already working to defer that crunch, for example through environmental technologies and data-driven improvements in efficiency and resilience. But driving those changes quickly through a business with a thirty-year asset lifecycle will demand more concerted action. Maybe not an anti-growth coalition, but at least a coalition committed to finding a new route to sustainable growth.
That need is evident in many of the challenges facing the industry. That shipyards are often the blocking point in the uptake of new technologies; hardly surprising when shipowners expect them to guarantee the performance of unproven solutions. That innovative efficiency solutions are so often the preserve of the companies with the biggest fleets and deepest pockets, leaving the vast majority of operators far behind. And that even when new technology is considered, the vital question of who pays for it remains a sore point.
All these issues point to the need for a fundamental shift in shipping’s approach to risk and reward. One means of achieving that is through sheer societal force. Witness the accelerating response to shipping’s environmental and climate impact, prompted into late self-regulation by the obvious will of the global community. The role of previously marginal players in that change – notably the Pacific Island states at IMO level – highlights how diverse voices can help deliver sustainable business.
The other driver must be financial. In recent years committed groups of banks, charterers and owners have pledged to incentivise environmentally responsible business and support wider uptake of green solutions. Those pledges will come under increasing scrutiny and have more direct financial impact as corporate requirements to report environmental, social and governance metrics increase. Soon, at least in Europe and the US, those requirements could include indicators on diversity as well as the environment.
Perhaps ironically for an industry which often operates out of public sight, greater visibility will actually promote better results: environmentally friendly shipping leads to long-term cost savings in the name of efficiency, while greater inclusivity brings access to more innovative approaches to industry challenges.
Where financial and social drivers lead, the will to collaborate to adapt must surely follow. To meet the diverse demands facing shipping, the next decades must be defined by widespread innovation and collaboration, accompanied by a radical reworking of the risk-reward relationships that currently stymie progress.
In retelling the tale of the tinned salmon, the moral must be that the global supply chain miracle does not just benefit logistics providers and their customers, but spreads wider social, economic and environmental value.
