SUSTAINABILITY OF GLOBAL SHIPPING
Introduction
International trade is on the rise with many countries and business persons choosing to source some of their goods overseas. This move prompts the use of various channels of transporting their products, including the use of air or water. A lot of cargo is currently being transported by ship. However, this process is marred with a lot of risks, including environmental pollution. The goods have the risk of getting stolen or getting lost in the sea as a result of an accident. More sustainable shipping practices are being adopted worldwide through a change of policies and implementation of the law of Carriage of Goods by Sea[1] that governs the shipping process.
Increased global trade and population is exerting a lot of pressure on the environment. Maritime transport, which is the great facilitator of global trade, is estimated to contribute to 3% of the CO2 emissions in the world. This percentage is bound to increase in the future if measures are not taken to control this level of pollution. Environmental pollutions are not limited to carbon emissions only but also water pollution with plastics, shipping recycling practices by countries like India, and underwater noise from the ships. Furthermore, organisms like whales get killed by moving vessels. Despite the myriads of steps undertaken by many countries to address these challenges, the issue of global shipping sustainability is very urgent and yet to be attained.
Sustainable Shipping
Importance of Sustainability in the Shipping Industry
Sustainable shipping is an aspect of the shipping sector aimed at achieving sustainable development in regards to environmental and social responsibility. Sustainable shipping is the outcome of strengthening the three pillars of the industry, which are environment, society, and the economy. Various factors impact the sustainability of global shipping from regulatory to socio-economic factors, market-related factors, and human factors[2]. A collaboration of multiple stakeholders and understanding the diverse needs, concerns, and expectations are essential in enhancing sustainability in the shipping industry.
A lot of efforts have been put in the maritime industry to help achieve sustainability in this sector, but more is yet to be done. Critical stakeholders in the business like Haugland suggest that new regulations and technology are essential to improved sustainability in global shipping. Participant countries should be intentional about changing their ways of conducting trade, especially that concerns the waters to attain sustainability[3]. Both private and public stakeholders should collaborate to achieve the required level of sustainability in the shipping industry.
Consumers in the shipping industry are becoming more cautious about the effects of pollution on the environment and their health. Thus, they require companies to incorporate sustainability measures while conducting their business[4]. Shipping is a critical component of the supply chain businesses. Therefore, the key stakeholders in the supply chain and logistic sector implementing measures to assist in enhancing sustainability in the shipping industry. Some of the recommendable steps include:
Reduction of Carbon Emissions
Manufacturers can use environmentally friendly materials to make and package their goods as the shipping process is marred with a lot of carbon emissions. Investors should be willing to pay the extra cost of minding the environment, which will otherwise not influence their profitability.
Shipping in bulk
Companies are now encouraging consumers to do bulky shipping for the benefit of their environment and also their wallet.[5] Bulky shipping will help reduce the carbon emissions that would have otherwise happened if the ship was to make many rounds with few items on board.
Use of sustainable and reusable packaging
Sustainable packaging entails minimizing the products and packaging that are not friendly to the environment. One of the most significant pollutants of the sea is plastic packaging. Waste and biodegradable materials from the environment can be used in the production of various goods to reduce pollution. The versatility of the products used in packaging is also an essential factor for sustainability.
Putting in place a return program for empty product containers
To enhance sustainability in the shipping industry, companies are resulting in packaging products in biodegradable materials that will not cause harm in the environment. Consumers are being encouraged to return their used packaging for a refill, recycling, or proper disposal. This move will ensure that there is reduced disposal of waste to the environment, especially in water, which interferes with sustainability in the shipping industry. The effect of pollution significantly impacts the life of consumers. This has made the consumers be on the frontline in appreciating efforts made by various companies to put in place measures that enhance the sustainability of the shipping industry.[6]
Implementing sustainable shipping solutions
All measures highlighted above are all aimed at increasing sustainability in the shipping industry. Companies can collaborate with consumers to have the same vision of enhancing sustainability in this sector. This move can be made by encouraging consumers to recycle their items, ship back packages that can be reused or recycled. Companies should conduct more research to improve the kind of things that they ship to other countries. Their brand should be a footprint of protecting the environment and doing activities that will enhance the sustainability of the shipping industry. Societal awareness of the maritime sector has been heightened by enhanced communication technology.
It is worth noting that the issues of sustainability in the maritime industry are complex, and companies ought to be concerned about it. The anticipated change in the operating environment is set to open up new challenges and uncertainty for the operators in the industry. Factors like environmental issues, reduction in carbon emissions, changes in technology, regulations, and trade patterns will inform the maritime industry soon.[7]
In an attempt to address the issue of suitability, nations across the world have come up with different measures to enhance sustainability in the shipping industry.[8] For instance, the European Union Framework set up the European Sustainable Shipping Forum to address some of the issues related to the maritime industry. Some of the reasons that led to the establishment of this forum include;
Sustainability of the transport sector is a vital component of the transport policy in Article 90 of the Treaty on the Functioning of the European Union.
Maritime transport plays a vital role in attaining a more efficient EU transport as highlighted in the White Roadmap to a Single European Transport Area- ‘Towards a competitive and resource-efficient transport system.’
There was a need to have a reliable stakeholder platform where interested parties would have a dialogue on the way forward and work towards a common front. This need was highlighted in the Commission staff working document, “Pollutant emission reduction from maritime transport and the Sustainable Waterborne Transport Toolbox.”
There was the need to develop environmental-friendly policies in the maritime industry, including those highlighted in the Commission’s staff working paper of 16 September 2011 entitled “Pollutant emission reduction from maritime transport and the sustainable waterborne transport toolbox” and those aimed at reducing the negative impact of sulphur emissions.
The importance of the international shipping industry in different economies cannot be underplayed. It has enhanced the advancement of global trade, economic development, and the general global standards of living. Approximately ninety percent of the global trade is conducted by sea, thus the importance of global shipping. An increase in population and an expansion of the world economy will see an increase in the volume of maritime trade. An efficient and cost-effective maritime transport is important for the growth and development of nations within the globe. It enhances the transportation of raw materials and energy in bulk across continents that is important in the running of various companies across the globe.
Pillars of Sustainability
As highlighted above, the sustainability of the shipping industry is based on three interrelated factors, including; environmental, social, and economic. They are seamlessly interconnected, where a negative impact on one variable affects the other two. The shipping industry offers employment opportunities to many people across the globe. Thus its sustainability should be carefully considered. World trade is largely based on the shipping industry because it helps in the transportation of goods that are important for development. The future dictates the application of stringent laws that will help in protecting the environment and enhancing fair competition among the players.
Social Sustainability
Social sustainability is one of the pillars that ensure sustainable global shipping. This industry is a source of employment for many people across the globe. Many people are employed as ship handlers, captains, and offshore attendants. Social sustainability entails putting in place measures that will protect the workers in this industry.[9] Workers ought to be empowered with the appropriate navigational protection measures that will protect their lives as they go about their business in the sea. If the industry will not take good care of the employees, then the sustainability of this industry is at stake. Workers are allowed to join trade unions of their choice that will advocate and address their issues to the relevant stakeholders. The shipping industry drives the economy. Thus it is vital for its workers to be handled appropriately. Participant nations should improve maritime safety to ensure that the operations of the industry go on seamlessly.
Economic Sustainability
The shipping industry is a key component in the economy of most countries. It enhances the movement of goods, energy, and raw materials, which are vital for the industrial development of most countries. Stakeholders of the shipping industry should ensure sustainability in the industry by according equal attention to the three pillars. Economic sustainability is as equally important as social and environmental sustainability. If good proceeds are not obtained from the industry, it will be difficult to implement measures that ensure the sustainability of the other two pillars. A cost-benefit analysis needs to be conducted before implementing measures that enhance sustainability. Bad proceeds mean that the employees will not be paid well, thus affecting their productivity and the overall sustainability of the industry. Lack of profits will hamper the implementation of good environmental strategies. Thus, economic sustainability in the shipping industry is very important as it ensures the success of other pillars.
Environmental Sustainability
The Concept of environmental sustainability has been one of the major components of sustainability that has been highly enhanced by scholars. A well-sustained environment also translates into a sustained shipping industry.[10] Despite the risks involved in this industry, many measures have been put in place to ensure that damages like oil spills have been reduced. The protection of the environment will lead to a lasting positive impact on the industry. Some of the measures to enhance environmental sustainability include;
Reduced carbon emissions
The shipping industry is the only global sector that has come together to address the issue of climate change. Countries that depend on this industry for their raw materials and other goods support proposals aimed at reducing carbon emissions to the atmosphere. For instance, the use of Energy Efficiency Design Index (EEDI) for new ships and the use of Ship Energy Efficiency Management Plans for existing ships has helped reduce the present carbon emissions, and it is expected to also reduce it in the future. The Monitoring Reporting and Verification plans aimed at monitoring the emissions in this industry include.
Use of low sulphur fuel.
The industry is looking forward to shifting from the use of heavy residual fuel oil to low sulphur fuel. This move is anticipated to minimize the level of sulphur emissions to the atmosphere and thus to protect the environment. All countries, including the developing nations, will shift to using the Exhaust Gas Cleaning System of the LNG. However, the countries are using the distillate, which is a bit pricy compared to the normal fuel. This cost is expected to be transferred to the customers who have their goods shipped. All these measures are aimed at protecting the environment, especially the sea environment, which is important for the shipping industry.
Recycling of ship.
The recycling of ships is aimed at protecting the environment from the pollution that comes with old ships. The owners of the ship have to keep a proper inventory of the vitals of the ship that will be required during the recycling process. The process of recycling ships enhances environmental sustainability.[11] This is because the resources are used well, and there is minimal pollution to the environment.
Ballast Water Treatment.
Unfortunately, most of the waste from ships was being disposed of in the sea. This move is a great disruption to the environment, especially to the aquatic life and the general appearance of the water.[12] Countries ought to gear up by setting aside finances aimed at dealing with the menace to enhance a sustainable shipping industry.
Areas of concern in the Shipping Industry
In a bid to enhance sustainability in global shipping, several issues are expected to come up that were unprecedented. These factors include cyber-attacks and theft, a worldwide economic crisis, pollution, poor governance, and geopolitical tension. Many sectors in various economies are experiencing changes in their modes of operations, of which the maritime industry is not an exception. These changes pose the need for greater awareness of the lasting factors that can affect the sustainability of the global shipping business.
The global shipping industry is facing many challenges that would bring unanticipated disruptions for the companies that are not prepared and opportunities for the prepared countries. Thus, the need to follow up on the challenges and opportunities presented by technology, the industry, and the new regulations being put in place in the industry. These changes inform the state of this industry in the future.
However, these challenges can be mitigated by enhanced operations and the incorporation of new technology into the industry. These developments include environmentally friendly ship designs, well-designed engines, propellers, hull forms and coatings, slow steaming, optimized speed, and weather routing systems. Use of alternative and cost-effective fuel like natural gas, biofuels, and fuel cells instead of heavy fuel oils; improvement in hybrid solutions, battery systems, and ship electrification[13]; enhanced infrastructure for faster turnaround times and increased capacity of the port; enhancing the technologies with scrubbers and exhaust gas recirculation; integration of the systems, smart maintenance, automation and remote operations; use of sensors, big data, computational fluid dynamics, performance management systems.
Despite being the most efficient way of transporting goods globally, the industry is facing challenges and uncertainty from the new regulations, technology and transparency from other stakeholders. These factors are affecting the sustainability of container shipping in the future.
Many shipping companies are changing their operations to accommodate the technological and operational changes that are taking place in the industry. These measures are aimed at increasing the sustainability of the global shipping industry. Examples of these companies include NYK (Nippon Yusen Kaisha), RCCL (Royal Caribbean Cruises), Carnival, Maersk and Wilhelmsen among others. These companies are going the extra mile to enhance their operations by adopting the latest technologies to enhance their sustainability and ensure that their businesses are meeting the demands of the market and society.
Sustainability in global shipping will be achieved when the participants in this value chain work together. Collaboration and teamwork are important for a sustainable global industry.[14] The move to a green economy promises a secure future for the industry with increased job opportunities and massive transformation. However, these benefits are set to be realised when participants in this industry work together. The collaboration of the public and private sectors will enhance sustainability in the industry through the implementation of sound policies that are geared towards sustainability. Teamwork brings new perspectives into the industry and improves the decision-making process.[15]
Sustainability is also enhanced through regulations that are meant to change or improve the working of various participants in the industry. International organisations have been active in introducing measures aimed at reducing the carbon emissions to the air and sea. These regulations are set to intensify in the coming years. Other stakeholders like bankers, charterers, insurance companies, and investors are set to stipulate stringent measures in trying to enhance energy efficiency and minimising on greenhouse gas emissions.[16] It is important that even as companies and all stakeholders involved are alive to the issue of sustainability, they should look into the financial factors that affect the running of these maritime industries. The measures put in place should encourage investment as well as sustainable practices. All participants of the industry should be engaged to attain sustainability in global shipping.
Conclusion
Global shipping has a great impact on many economies across the globe. This is because it highly influences trading activities. The question of the sustainability of the industry has been a concern to many stakeholders leading to a series of forums to address this issue of sustainability. Global shipping is sustainable only if participating countries can adhere to the set regulations and embrace all the guidelines that promote sustainable shipping. The issue of sustainability is based on three pillars, including economic sustainability, social sustainability, and environmental sustainability. Economic sustainability is the backbone of both social and environmental sustainability, where they cannot operate if there are no finances to take care of them. Countries ought to set aside finances to pay the workers in the shipping industry and to facilitate the implementation of all the laws aimed at enhancing sustainability.
Social sustainability entails minding the welfare of the workers in this industry. Workers run all the operations, and if they are not well taken care of, then the industry will suffer a setback. These workers should be allowed to join trade unions that will advocate for their rights and ensure that they are well rewarded. Environmental sustainability is another critical aspect of the sustainability of the global shipping industry. It is vital to protect the waters and the organisms therein. There should be measures put in place for proper waste management. Shipping vessels should minimise oil spillage, the release of carbon dioxide, and sulphur to the atmosphere and disposal of plastics to the ocean. A collaboration of nations in the bid for sustainable global shipping is very vital. Global shipping runs the global economy because most of the raw materials used in industries are transported over water to many continents. These industries are a source of livelihood for many people living in countries engaged in global trade. The collaboration will also lead to climate change.
References
Andersson, K., Baldi, F., Brynolf, S., Lindgren, J.F., Granhag, L. and Svensson, E., 2016. Shipping and the Environment. In Shipping and the Environment (pp. 3-27). Springer, Berlin, Heidelberg.
Koilo, V., 2019. Sustainability issues in maritime transport and main challenges of the shipping industry. Environmental Economics, 10(1), p.48.
Kolomiiets Y. Sustainability challenges for the modern shipping: legal analysis. Lex Portus. 2019;19:21.
Lam, J.S.L. and Lai, K.H., 2015. Developing environmental sustainability by ANP-QFD approach: the case of shipping operations. Journal of Cleaner Production, 105, pp.275-284.
Malindretos, G. and Sklavakis, J., 2015, September. INNOVATION AND SUSTAINABILITY IN MARITIME TRANSPORT: GREEN SHIPPING. In ICQQMEAS2013.
Mansouri, S.A., Lee, H. and Aluko, O., 2015. Multi-objective decision support to enhance environmental sustainability in maritime shipping: a review and future directions. Transportation Research Part E: Logistics and Transportation Review, 78, pp.3-18.
Pallis, A.A. and Vaggelas, G.K., 2019. Cruise shipping and green ports: a strategic challenge. In Green Ports (pp. 255-273). Elsevier.
Poulovassilis, A. and Meidanis, S., 2013. Sustainability of shipping–Addressing corporate social responsibility through management systems. Saatavilla: http://www. commonlawgic. org/sustainabilityof-shipping. html [2.8. 2013].
Poulsen, R.T., Ponte, S. and Lister, J., 2016. Buyer-driven greening? Cargo-owners and environmental upgrading in maritime shipping. Geoforum, 68, pp.57-68.
Poulsen, R.T., Ponte, S. and Lister, J., 2016. Buyer-driven greening? Cargo-owners and environmental upgrading in maritime shipping. Geoforum, 68, pp.57-68.
Sarkis, J., Helms, M.M. and Hervani, A.A., 2010. Reverse logistics and social sustainability. Corporate Social Responsibility and Environmental Management, 17(6), pp.337-354.
Shin, Y. and Thai, V.V., 2015. The impact of corporate social responsibility on customer satisfaction, relationship maintenance and loyalty in the shipping industry. Corporate Social Responsibility and Environmental Management, 22(6), pp.381-392.
Sislian, L., Jaegler, A. and Cariou, P., 2016. A literature review on port sustainability and ocean’s carrier network problem. Research in transportation business & management, 19, pp.19-26.
Wu, X., Zhang, L. and Luo, M., 2019. Discerning sustainability approaches in shipping. Environment, Development and Sustainability, pp.1-16.
Yuen, K.F. and Lim, J.M., 2016. Barriers to the implementation of strategic corporate social responsibility in shipping. The Asian Journal of Shipping and Logistics, 32(1), pp.49-57.
[1] Kolomiiets Y. Sustainability challenges for the modern shipping: legal analysis. Lex Portus. 2019;19:21.
[3] Wu, X., Zhang, L. and Luo, M., 2019. Discerning sustainability approaches in shipping. Environment, Development and Sustainability, pp.1-16.
[4] Shin, Y. and Thai, V.V., 2015. The impact of corporate social responsibility on customer satisfaction, relationship maintenance, and loyalty in the shipping industry. Corporate Social Responsibility and Environmental Management, 22(6), pp.381-392.
[5] Wu, X., Zhang, L. and Luo, M., 2019. Discerning sustainability approaches in shipping. Environment, Development and Sustainability, pp.1-16.
[6] Poulsen, R.T., Ponte, S. and Lister, J., 2016. Buyer-driven greening? Cargo-owners and environmental upgrading in maritime shipping. Geoforum, 68, pp.57-68.
[7] Koilo, V., 2019. Sustainability issues in maritime transport and main challenges of the shipping industry. Environmental Economics, 10(1), p.48.
[8] Lam, J.S.L. and Lai, K.H., 2015. Developing environmental sustainability by ANP-QFD approach: the case of shipping operations. Journal of Cleaner Production, 105, pp.275-284.
[9] Poulovassilis, A. and Meidanis, S., 2013. Sustainability of shipping–Addressing corporate social responsibility through management systems. Saatavilla: http://www. commonlawgic. org/sustainabilityof-shipping. html [2.8. 2013].
[10] Andersson, K., Baldi, F., Brynolf, S., Lindgren, J.F., Granhag, L. and Svensson, E., 2016. Shipping and the Environment. In Shipping and the Environment (pp. 3-27). Springer, Berlin, Heidelberg.
[11] Malindretos, G. and Sklavakis, J., 2015, September. INNOVATION AND SUSTAINABILITY IN MARITIME TRANSPORT: GREEN SHIPPING. In ICQQMEAS2013
[12] Pallis, A.A. and Vaggelas, G.K., 2019. Cruise shipping and green ports: a strategic challenge. In Green Ports (pp. 255-273). Elsevier.
[13] Sislian, L., Jaegler, A. and Cariou, P., 2016. A literature review on port sustainability and ocean’s carrier network problem. Research in transportation business & management, 19, pp.19-26.
[14] Yuen, K.F. and Lim, J.M., 2016. Barriers to the implementation of strategic corporate social responsibility in shipping. The Asian Journal of Shipping and Logistics, 32(1), pp.49-57.
[15] Sarkis, J., Helms, M.M. and Hervani, A.A., 2010. Reverse logistics and social sustainability. Corporate Social Responsibility and Environmental Management, 17(6), pp.337-354.
[16]Mansouri, S.A., Lee, H. and Aluko, O., 2015. Multi-objective decision support to enhance environmental sustainability in maritime shipping: a review and future directions. Transportation Research Part E: Logistics and Transportation Review, 78, pp.3-18.