BIMCO’s Reflections is published each year and delivered to all BIMCO members. It is a short and accessible analysis
From Anastasios Papagiannopoulos, President BIMCO’s forward
2018 has been an eventful year in shipping, and I believe 2019 will be no less interesting. From our vantage point in BIMCO, the industry is moving in the right direction. There were three industry-driving issues in 2018, and all are likely to dominate the headlines even more in 2019: the 2020 sulphur cap; reducing greenhouse gas emissions; and economic protectionism.The convergence of these high-impact issues will be a hard-to-manage trio of challenges for the leadership teamsof every shipping industry company. The implementation of low sulphur regulations will require an additional eye on risk management. Operational procedures and on-board practices will have to change. Planning for – and ensuring compliance from – 1 January 2020 is going to top the agenda of management teams over the coming year. There will also be a need to protect all participants through the transition and beyond; BIMCO is busy crafting a suite of sulphur clauses that will be promptly published. Greenhouse gas emissions will continue to be a big issue far beyond the immediate horizon. To have any chance of meeting the greenhouse gas targets agreed at the IMO in April – in particular, the 50% reduction by 2050 – we will need to invest in research and innovation focused on zero carbon fuels and propulsion units. Future emissions from shipping are not nearly as bad as previously forecasted, as seen in the recalculation (as requested by BIMCO)of the original Third IMO GHG Study by its author, CE Delft. Despite this, the study still shows a big gap that we need to close to reach a 50% cut in total carbon emissions. Both environmental issues have the potential to disrupt our industry. At BIMCO we will concentrate our efforts on developing and proposing pragmatic solutions, which will minimise the environmental footprint and optimise the efforts of the shipping industry. What I certainly had not predicted was a return to economic protectionism, with the United States as the leading proponent. The impact and disruption of Donald Trump’s presidency on shipping is hard to measure. BIMCO is continuously analyzing the impact and it is clear that there are both predictable and unpredictable consequences to trade. Asexpected, US soya bean exports to China have dropped, reducing transport miles and making the deployment of ships harder. What was not expected were Chinese crude oil imports from the US dropping to zero in August and September, despite the fact that there are no tariffs on oil. The wider effectson the world economy and world trade are only just beginning to show.