Reed Smith LLP

Maritime Risk International, March 2019, p20-21

Is the shipping industry embracing the digital age

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Home Perspectives Is the shipping industry embracing the digital age
We are living in what it is tempting to call “interesting times”, with world trade changing and sanctions dominating. At the same time, while the changes in technology that we have seen in the last 20 to 30 years are ones that it is difficult to imagine being overshadowed by those yet to come, that is what we are told is the future. We, therefore, asked the shipping industry what it is expecting in the next five years in terms of technological drivers and efficiencies and what it sees as its greatest challenges.

Technological drivers

Perhaps unsurprisingly, one of the most significant drivers for the next five years is seen to be technology to address environmental issues and emissions. MARPOL Annex VI, regulation 14, which imposes a global emissions limit for sulphur in fuel oil on board ships of 0.5 per cent from 1 January 2020, has been said to
be “the single most expensive environmental regulation the shipping industry has ever faced”.

In Greece there was an almost palpable change in attitude to scrubbers after Posidonia 2018. And although the trade press is full each week of reports of countries that will not allow open loop scrubbers and companies saying they will not go down the scrubber route, it is also full of plenty of stories of owners who are changing their minds and fitting scrubbers on at least some of their vessels. This is notwithstanding the uncertainty as to, inter alia:

  • whether low and high sulphur fuel prices will level out;
  • the impact of scrubbers on vessels’ performance;
  • contractual liabilities;
  • the availability of low sulphur fuels;
  • the acceptance of open loop scrubbers in certain jurisdictions; and
  • what the next level of regulation (hopefully, to protect the sea) will be. 

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2019 Informa plc. This article first appeared in Maritime Risk International, March 2019, p20-21.