In an exclusive interview to SAFETY4SEA, James Hookham, Secretary General and Director of the Global Shippers Forum, advocates for a a more customer-centric culture that would help establishing a robust relationship for carriers to invest in the expenses associated with digitalization and decarbonization.
Concerning decarbonization, James emphasizes the uncertainty surrounding the shipping industry’s journey toward achieving net-zero emissions by 2050. The Global Shipper Forum is dedicated to promoting and safeguarding the interests of shippers. It is actively supporting them in adapting to the complex challenges of deglobalization, decarbonization, and digitalization to ensure ongoing competitiveness.
SAFETY4SEA: What are your top priorities in the agenda for the next 5 years?
James Hookham: GSF’s top priorities for the next five years are focussed on advancing and defending the interests of shippers in global decision-making bodies and public debate. We expect this mission to require us to focus on the following activities:
- Monitor and report on the service levels and performance of the container shipping industry as the sector adapts to the multiple challenges of deglobalisation, decarbonisation, digitalisation and restructuring around new competition rules.
- Inform and advise shippers on how to ‘record, report and reduce’ greenhouse gas emissions from their supply chain activities.
- Raise awareness of the need for, and means of, safely and securely packing cargo in containers to minimise safety risks during transport and handling.
- Likewise, minimising contamination of containers and cargoes by potentially invasive pests.
- Support and encourage shippers in adapting to the digital transfer and processing of trade and transport documents, whilst demanding high standards of data protection and governance by platform providers.
S4S: What are some of the major challenges faced by shippers and cargo owners in international trade, and how is Global Shippers Forum addressing these challenges?
J.H.: The biggest challenge that will be faced by shippers over that time period will be navigating the many obstacles and barriers that result from a continuing erosion of globalisation and free trade and adoption of protectionist measures. These will complicate the job of shippers and supply chain managers as many of these protectionist policies manifest themselves as increased trade and border frictions that shippers are responsible for understanding and complying with.
S4S: What opportunities does GSF see for enhancing efficiency and sustainability in the shipping industry?
J.H.: The shipping industry’s route to net-zero is still unclear in terms of the fuels and propulsion technologies that will be powering ships by 2050. Many shippers, however, are under pressure from their shareholders, customers and regulators to record, report and reduce their own greenhouse gas emissions, including those from their supply chain, classed as Scope 3 emissions. These emissions are the Scope 1 and 2 emissions of the transport and logistics service providers physically moving the goods. The most important contribution shippers can make is to ask for, and expect to receive, 1) an estimate of the GHG emissions attributed to the movement and handling of their goods; 2) a commitment by the logistics provider or carrier to a plan to reduce these emissions in line with the targets in the Paris Agreement on climate change, recognising that much of the required reduction will only be made once the optimum marine fuel mix has been identified; and 3) expect the adoption of available and realisable efficiency measures in the meantime to minimise the impact of carbon taxes and trading schemes, which carriers will almost certainly seek to pass on to shippers as new and additional surcharges.
S4S: What opportunities does GSF see for enhancing efficiency and sustainability in the shipping industry?
J.H.: Shippers can best support the efforts of shipping lines to reduce greenhouse gas emissions by requesting emissions estimates for containers moved (tonnes per teu) and track the decline of this value over time. Shippers should also seek continuous improvement in emissions reductions. Meaningful GHG emission reductions will be achieved at a significant cost, but new international requirements will drive year-on-year energy efficiency improvements anyway, and the resulting reductions should be reported by carriers and the carbon saving reported on to customers.
S4S: What are the key actions that will make a step change in industry’s performance across a zero-emission future?
J.H.: Aside from a technological breakthrough in the efficiency of renewable energy generation, the step-change most likely to transform the shipping industry’s progress to net-zero by mid-century would, in my view, be an internationally binding ban on the building of ships powered by conventional marine fuels by a certain date, say 2035, followed by an equally stringent ban on their operation after, say, 2050. This is the strategy adopted by many governments for the automotive sector which through setting dates for the ending of petrol and Diesel engines has successfully stimulated the market demand and the supply-side confidence to bring forward zero-carbon fuelled vehicles.
S4S: In your view, what needs to change to raise industry’s profile and attract the future talents?
J.H.: For decades businesses have preferred to keep the sophistication of their supply chains and logistics operations hidden from public view. For the consumer, goods just appear on the shelves or at the front door, having been delivered at no apparent cost. Is it any wonder consumers fail to appreciate the wonders of logistics, never mind contemplate pursuing a career there? As an industry we have a good story to tell those looking for a rewarding and stimulating work, and to make a difference to the sector’s environmental impact and social contribution. Initiatives such the UK’s ‘Generation Logistics’ programme, a cross-industry collaboration part funded by government, need to be replicated across the globe to help re-set public perceptions.
S4S: What is your wish list for the industry and/or regulators and all parties involved with respect to container ship safety?
J.H.: The safe, secure and clean packing of cargoes into intermodal freight containers is becoming a key focus for shippers, forwarders, and carriers. Shipping lines are rightly concerned at the frequency of on-board fires, originating in containerised cargoes, some of which have fatal to seafarers, resulted in the devastation of marine environments and in the loss of the ship itself. The cause of these have too often been attributed to presence of mis-declared, or undeclared, dangerous goods in consignments, often from ignorance of the rules governing such shipments, sometimes because of their deliberate evasion. This is problem that affects all parties involved. Responsible shippers who are fully conversant with the required procedures risk the integrity of their being compromised by the misdeclared goods in the adjacent container in the stack. Smart cargo screening tools are being commissioned to detect suspect cargoes from their descriptions on transport documents. These will help tackle a growing problem, but carriers could rethink their traditional approaches to surcharging declared dangerous goods shipments, and make compliance a less expensive option, rather than seeming to penalise it. Regulators too, should revisit their pricing strategies for copies of the Dangerous Goods Regulations and encourage the development of derivative guidance to encourage wider awareness and understanding. The consignment and transport of dangerous goods should be essential and accessible reading, not a pricing point! (You did say it was a wish list!)
S4S: How does GSF collaborate with its members to encourage the adoption of best practices in the shipping industry?
J.H.: A prime role of a trade association, in my view, is to help its members understand what is expected of them by regulators and other stakeholders, by explaining regulatory requirements and industry best practices in a language understood by the industry. GSF produces a range of explanatory guides and briefing documents for the exclusive use of its members on new and emerging issues and recently adopted requirements. These guides contain insights and explanations based on the knowledge and experience of the Secretariat and members of GSF’s working groups and committees that review the documents before they are published. Recent topics covered have included the correct use of Incoterms ® for containerised transport; the procedures for the safe packing and unpacking of goods in containers; the development and implementation of greenhouse gas reduction programmes in international supply chains; and the protection and governance of commercially sensitive data in digital trade and logistics platforms. Several of these have been published jointly with other trade bodies.
S4S: If you could change one thing in the shipping industry from your perspective, what would it be and why?
J.H.: I would flip the switch that would change the perception of cargo owners in the industry from ‘shippers’ to customers. The customer service ethic in the industry is not great, yet this is the sector that works with some of the biggest consumer-facing brands in the world. Establishing a more customer-centric culture would help generate the longer-term contractual relationships that container shipping lines crave and provide a far more stable base on which carriers could invest in the costs of decarbonisation and digitalisation. Those container shipping lines developing more integrated, ‘door-to-door’ business models will need to make this switch more urgently if they are to meet the expectations placed on full-service logistics providers. The benefits would flow both ways. Many cargo owners have years more exposure to, and experience of, managing the carbon transition in their own sector as well as doing business digitally. The learnings and development risks are much more likely to be shared in a more trusting and collaborative environment. Were this to happen, and shippers were to become truly valued customers, what would happen to an organisation called the Global Shippers Forum? Well, I think we would quietly take our leave, as our work would evidently be done!
The views presented hereabove are only those of the author and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.