Monday, December 27, 2010

A LOOK INTO INTERNATIONAL SHIPPING

As 2010 draws to a close and a global economic recovery of sorts gathers pace, it is sobering to reflect on just how close the western financial system came to collapse two short years ago. Were it not for some swift and decisive action taken by governments to bail out the many banks that had overplayed their hand, goodness knows what shipping journalists would be writing about today.
Thinking about how close many industrialised nations came to civil disaster leads on to the realisation that modern lifestyles are almost totally dependent on the finely tuned logistics of global shipping. Computerisation and sophisticated voyage planning enable inventories to be minimised and supermarket shelves and petrol stations to be restocked on virtually a daily basis.
Such home truths often go unappreciated by a society which over the past two decades has become increasingly cosseted as well as more risk-averse than ever before. Rather than dwell on the ramifications of a global financial meltdown, people lie awake at night worrying about what are perceived to be the burning issues of the day, notably terrorism, climate change, environmental pollution, petrol prices and energy shortages.
Over the course of 2010 these fears have been fed by a steady stream of headlines along the lines of:
- “US trade jeopardised by lack of adequate port security measures”
- “India to refuse entry to single-hull tankers from 2011”
- “Piracy a major threat to energy and food supplies”
- “New call for carbon charges on aviation and shipping”
- “Future fuel bottleneck requires shipping industry action”
- “Implementation of ballast water regime presents major challenges”
- “Biofuels gain within fuel mix could be slow”
- “UK petrol prices hit new record amidst concerns over oil supplies”
Hindsight is a wonderful thing, but it has to be said that the global response to the 9/11 attacks could have been handled much better. The rush to establish a cordon sanitaire around the lives of every citizen in the immediate aftermath of the attacks played into terrorist hands, and sent out shock waves that are still being felt today. While no-one would decry the introduction of most of today’s new airport security measures, the wisdom of implementing an equally rigorous system for ships and ports worldwide is questionable at best. Politicians like to be seen to be taking effective action but over-reaction is a term that springs to mind when considering the extent to which they would like to see world freight shipments vetted. Homeland security divisions of government have set their enforcement agencies impossible targets and introduced a welter of restrictions on seafarers and port workers in the process. One wonders about the extent to which the skills of statisticians have been employed in assessing risks before moving ahead with some of the port security measures that have been tabled. The overseas screening of freight containers on a 100% basis, the expansion of vessel tracking to all small vessels and a major commitment to intelligence gathering are regarded as bridges too far by most wise heads in both industry and the enforcement agencies entrusted with policing the waterfront.
The number of seafarers that have been taken hostage by pirates in the Gulf of Aden and off East Africa in 2010 is approaching the record number established last year; this, despite the increasing number of naval patrol vessels deployed and other anti-piracy measures introduced by the shipping 
community. The trend adds further weight to the belief that the problem has to be tackled at source.
While the Royal Navy may have been successful in ridding the seas of slave traders two centuries ago, a
different approach is needed today. Until some degree of control is established in the lawless land that is Somalia and the era of the war lord is brought to a close, piracy is unlikely to go away. For those who thought the year of peak oil was 2007, it is time to think again. Preliminary results indicate that global oil consumption in 2010 will reach the record level of 86.7 million barrels per day (b/d), 100,000 b/d more than in 2007. While oil use in the US and Europe may be stable, increasing consumption by expanding Asian economies is driving the rebound in the demand for oil. However, the question as to whether or not the increase in oil consumption is sustainable is not going away. The extent to which oil reserves are finite is evidenced by the current rise in the price of oil towards the USD 100 per barrel mark. As the easily accessible oil deposits are depleted, the energy industry is moving offshore, into deeper waters, in search of new supplies. This, in itself, presents technological challenges while the full impact of the Deepwater Horizon blowout in the US Gulf last April on future drilling programmes remains to be felt.
The good news for the world at large is that gas is the new oil. Posted reserves of natural gas, already healthy, have been swelled in recent years by major finds of shale gas in the US. These discoveries have already turned the global gas market on its head and the promise of further unconventional gas development projects in other parts of the world over the coming decade heralds the dawn of the gas era. First off the block will be a series of major liquefied natural gas (LNG) export schemes in eastern Australia based on the use of Queensland coal seam gas. Gas is poised to relieve some of the pressure on the use of oil as a transport fuel. The number of LNG and compressed natural gas (CNG) fuelling stations worldwide is growing by the day. The initial beneficiaries have been the operators of taxi and municipal vehicle fleets but the attractions of gas, not least its competitive price and clean-burning properties, are gaining allies across the heavy goods vehicle community. Furthermore, gas is beginning to feature amongst the options being considered by ship owners facing up to the challenges posed by increasingly stringent requirements governing marine atmospheric pollution. Amongst the fossil fuels, natural gas in the form of LNG offers the optimum solution for limiting emissions of harmful pollutants and a number of LNG-powered coastal vessels are already in operation in Norway. Initially, it was thought that the use of LNG as a ship fuel would be limited to small vessels operating in close proximity to their fuelling stations. However, the technological challenges of providing LNG bunker 
tanks for large, deepsea vessels and supplying these tanks with the necessary fuel have been tackled with a range of exciting new designs. The use of gas as a transport fuel will also relieve some of the pressure imposed on biofuels by green lobby groups and politicians keen to limit man’s carbon footprint. It is now acknowledged that developing biofuels to anything like the volumes needed will impose unsustainable impacts on the global ecosystem. Looking back, 2010 has been another tumultuous year, made unnecessarily complicated by doom-laden and fear-inducing headlines repeated ad infinitum. Looking ahead, the worst of the global financial crisis is behind us and economies are beginning to grow again. The hope is that lessons have been learned and that careful thought will be given to the challenges which lie ahead. There are reasons to be cheerful this festive season and for moving on, into 2011, in an optimistic frame of mind. 
Source: Feature, BIMCO in DAILY COLLECTION OF MARITIME PRESS CLIPPINGS 2010 – 361
Texto by BIMCO. Imagens copyright L.M.Correia. For other posts and images, check our archive at the right column of the main page. Click on the photos to see them enlarged. Thanks for your visit and comments. Luís Miguel Correia
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