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How will the container shipping industry cope with the rising demand for sustainability and decarbonization?

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The container shipping industry is facing a huge challenge: how to meet the growing demand for sustainability and decarbonization while dealing with the impacts of the pandemic, such as container shortage and high freight rates. In this article, you will learn about some of the strategies and initiatives that the industry is adopting to reduce its environmental footprint and improve its resilience.

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Emilio Planas

Strategic thinker and board advisor shaping alliances and innovation to deliver real-world impact, influence, and…

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Sebastian Cazajus

CEO & Co Founder at Cargofive

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Vladimir Kostov

Logistics professional | Founder at freight.bg | Expert at Huvepharma

1 The problem of emissions

Container shipping is responsible for about 3% of global CO2 emissions, and is expected to increase its share as trade volumes grow. The industry has committed to reduce its emissions by at least 40% by 2030 and by 70% by 2050, compared to 2008 levels. However, achieving these targets will require significant investments in new technologies, fuels, and infrastructure, as well as regulatory and market incentives.

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Emilio Planas

Strategic thinker and board advisor shaping alliances and innovation to deliver real-world impact, influence, and economic value.
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The container shipping industry will address sustainability and decarbonization demands through multifaceted strategies. Key approaches include transitioning to cleaner fuels such as LNG and biofuels, adopting electric and hybrid vessels, and employing energy-efficient technologies. Ports will enhance green operations by implementing renewable energy sources, shore power, and electrification of port equipment. Digitalization, improving container utilization, and optimizing routes will reduce emissions. These efforts, coupled with robust environmental regulations and collaborative industry initiatives, will drive significant progress towards reducing the sector's carbon footprint.

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Sebastian Cazajus

CEO & Co Founder at Cargofive
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From my experience one of the main challenges in reducing emissions is the need for accurate data calculation for route optimization. Without precse data, companies are esentially operating blindly. For instance, when companies opt for a more "eco-friendly" solution based on transhipments or the distance of the route, the decision making process can be flawed if they lack crucial information about the vessel being used. Is common that companies don't the Vessel IMO in advance. The math and environmental impact can change dramatically depending on whether a company is using a 5k TEU container ship or a 15k vessel. Therefoe, accurate data in the supply chain are essential for making informed decisions that truly contribute to emission reduct.

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Joao Mendes

C-Level / Operations / Logistics / Board Member / Consultant
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Uso de energia renovável: A incorpora??o de fontes de energia renovável, como energia solar e eólica, nos processos portuários e opera??es de navios pode reduzir significativamente as emiss?es de carbono associadas às opera??es de transporte de contêineres.

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Luis Angel Mera

Boosting your Freight Forwarder Growth & Profitably in an Organized Manner, without having to Compete on Rates. | Strategic Mentor for Freight Forwarder CEOs and C-Level decision makers
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Key thing is to create norms and scale up production of alternative fuels. Maersk has started that journey with bio diesel, while CMA CGM also pursuing LNG. However ther eis still plenty of need to stract investment into this areas so that these alternative furls can be offer in such a scale so that can really become and alternative to bunker oil.

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2 The potential of alternative fuels

One of the main ways to decarbonize container shipping is to switch from conventional fossil fuels to low- or zero-carbon alternatives, such as biofuels, hydrogen, ammonia, methanol, or electricity. These fuels have different advantages and disadvantages in terms of availability, cost, safety, and compatibility with existing vessels and ports. The industry is exploring various options and testing their feasibility and performance in pilot projects and trials.

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Vladimir Kostov

Logistics professional | Founder at freight.bg | Expert at Huvepharma
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Alternative fuels in shipping are becoming increasingly important due to environmental concerns and regulations aiming to reduce emissions. Some common alternative fuels used in the shipping industry include LNG and ammonia.

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Paulo Melo

Vice President Sea Logistics South America
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Despite the increased availability of low-carbon fuels, it all comes back to the capacity to supply these at the right place. Today, there is still a lack of production capacity and availability, even for fuels that are in a more advanced stage of adoption, such as LNG.

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3 The role of digitalization

Another way to improve the sustainability and efficiency of container shipping is to leverage digitalization and data analytics. These can help optimize vessel operations, routing, speed, and loading, as well as enhance visibility, transparency, and collaboration across the supply chain. Digitalization can also enable new business models and services, such as smart containers, blockchain, and digital platforms, that can reduce costs, risks, and waste.

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Joao Mendes

C-Level / Operations / Logistics / Board Member / Consultant
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Otimiza??o de Rotas: A análise de dados em tempo real pode ajudar as empresas a otimizar rotas marítimas, minimizando distancias percorridas e reduzindo o consumo de combustível. Gest?o de Frota: Sistemas de monitoramento remoto podem ser implementados para otimizar o desempenho dos motores e sistemas de propuls?o, reduzindo o desperdício de combustível e as emiss?es de carbono. Opera??es Portuárias Eficientes: A digitaliza??o dos processos portuários, incluindo agendamento de atraca??o, movimenta??o de contêineres e opera??es de carga e descarga, pode reduzir os tempos de espera e o consumo de energia associado.

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4 The impact of the pandemic

The COVID-19 pandemic has disrupted the container shipping industry in unprecedented ways. It has caused a surge in demand for consumer goods, a shortage of containers and equipment, a mismatch of supply and demand across regions, and a spike in freight rates. These factors have increased the operational and financial challenges for the industry, as well as the environmental and social impacts. The industry has responded by adapting its capacity, network, and pricing strategies, as well as by implementing health and safety measures.

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5 The need for collaboration

The container shipping industry cannot achieve sustainability and decarbonization alone. It needs to work together with other stakeholders, such as shippers, ports, regulators, customers, and civil society, to align their goals, standards, and actions. The industry also needs to foster innovation and knowledge sharing, as well as to advocate for supportive policies and incentives. Some examples of collaborative initiatives are the Getting to Zero Coalition, the Poseidon Principles, and the Global Maritime Forum.

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Sebastian Cazajus

CEO & Co Founder at Cargofive
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Achieving sustainability and decarbonization in the container shipping industry requires robust collaboration among various stakeholders, including shippers, freight forwarders, shipping lines, ports, regulators, and customers. A key step is to ensure effective data sharing and standardization across the industry to facilitate awareness, better decision-making, and unified actions.

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6 The future of container shipping

The container shipping industry is undergoing a transformation that will shape its future for decades to come. The industry has to balance the demands of profitability, competitiveness, and customer satisfaction with the imperatives of sustainability and decarbonization. The industry also has to cope with the uncertainties and risks posed by the pandemic and other external factors. The industry has to embrace change and innovation, as well as to demonstrate leadership and responsibility.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jeremy Cohen-Tannugi

Business Strategist | Founder 3x Exits | Sense | Data | Impact Advisor
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Appreciate all enlightening contributions to make our planet a better place to live for our children and the next generations! To be boldly honest with ourselves, we must analyze the entire picture of shipping activities, including its illegal maritime portion per annum, with no decarbonization leverage on, even with SAR, Spire. Illegal, Unreported and Unregulated (IUU) fishing is estimated to account for 15% (US$15B) to 30% of global fish capture. Account for drug trafficking (US$500-600B), Human trafficking and lodging (US$200-300B), Illegal mining (US$20-30B), highly hazardous chemicals (US$10-50B), crude oil theft (US$5-10B), Weaponry (US$2-3B). Total estimated annual value of illegal shipping is US$1-1.5T and it isn't slowing down.

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Sebastian Cazajus

CEO & Co Founder at Cargofive
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Greater collaboration among stakeholders will be essential to address common challenges and drive innovation. Partnerships between shipping companies, ports, technology providers, and regulatory bodies will help standardize data, improve interoperability, and create a more resilient supply chain. Additionally, a stronger emphasis on customer-centric services will emerge, driven by the demand for increased visibility, reliability, and faster transit times.

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How will the container shipping industry cope with the rising demand for sustainability and decarbonization?

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1 The problem of emissions

2 The potential of alternative fuels

3 The role of digitalization

4 The impact of the pandemic

5 The need for collaboration

6 The future of container shipping

7 Here’s what else to consider

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