On Oct 7th the Singapore Shipping Association (SSA) and the Rotterdam Maritime Services Community (RMSC) had the privilege to organise an interactive webinar between the maritime business services clusters of two leading areas in the world; Singapore and Rotterdam.
The webinar started with a warm welcome to the more than 75 attendees by Dutch ambassador in Singapore Margriet Vonno and SSA president Caroline Yang, who both emphasised the importance of the clusters for the further development of opportunities like digitalisation and the transition to sustainable transport.
Caroline Yang said; “we leverage each other’s strengths and value-propositions to navigate the future and achieve a sustainable ocean economy. Establishments, from authorities at an international level and national level, as well as corporate entities must have the appropriate legal, regulatory, and policy framework. This should transcend beyond just shipping and port operations to related fields such as customs and immigrations clearance as well as into complementary sectors such as transport and logistics. The move towards digitalization also means the commitment from companies in all areas, including human capital. For those affected employees, they will need to be reskilled and retrained, where necessary.”
A highly trained workforce is necessary to make the transition in all parts of the industry and with this, the group of speakers directly dived into the first topic, focusing on sustainable financing. Everything is interconnected, said John Hu. New ship designs will have an impact on the financial agreements, and vice versa – is it a classic chicken-and-egg situation? Banks need to know how a ship is designed and if this is according to The Poseidon Principles. Mayank Somani and Pieter Baan pointed to EU regulations and compared it to the South Asia Ship Finance market, where there are still not enough incentives. New fuels, different propulsion systems etc that might make an investment more risky for the financiers.
High quality data of how ships operate is needed and therewith lenders can see how to identify their commitment. Who is willing to pay for the extra’s? Charterers will have a great say in this, and the industry is waiting for the large cargo-owners or charterers who will also look at the costs of the complete supply chain, according to Patrick Kirkman.
The insurance perspective was a more neutral discussion a bit less exciting, as from the P&I Underwriters point of view new designs are not that important, eco-friendly ships do not tend to have more or less risk (unless you get rid of bunkers, then it might change). Hull insurance may have some concern as premiums could. What will batteries on aboard of a ship mean for the risks? And of course, looking further into the future – what will diminishing of crew on board encompass? If you replace crew and focus on autonomous shipping, then the risks might decrease when looking at the human factors, but increase with cyber risks.
It seemed like insurance and capital providers have focused more on surviving the last years and now quickly have to catch up with developments, a view both Erwin van Geyte and Patrick Kirkman agreed upon. Now still on operational level, “Insuretech” developments – will in the future be linking ships directly for declarations etc (Port, health, etc).
To stay on top of the developments, tax incentives or levies might help to support sustainable shipping and ´greener’ vessels. There are limited elements now, both in EU and Asia, but the tonnage tax advantages are too small to make a real impact. Again here, green ships tend to be more expensive, so who will pay for that? Governments can organise incentives , but then have to be industry wide, to prevent a waterbed effect. Erns-Jan Bioch and Patrick discussed.
The maritime industry is a truly global industry while most initiatives are locally focused (e.g. EU regulations, etc). Therefore the different countries and companies should show the impact of the domestic measures.
The development of infrastructure will also make its mark – when looking at bunkering and storage (for example of LNG) LNG, Europe has the infrastructure, but Asia still has to get this rolled out in more areas. There Asia can learn from de EU. Europe is becoming (very) active on the green loan and bond side, though not for shipping, considering shipping assets (unless electric) are not considered green.
On the other hand, Singapore accelerates growth with green sustainable-linked bonds or loans, for businesses. All countries have their own rules, we should try to align these internationally.
The maritime business services companies can help the shipping companies with organising the level playing field, and need to provide the rule makers with the industry wide perspectives. Do we need the carrot or stick approach or both? As time was running short, this stayed an open question and maybe the topic for another get-together!
Moderator Gerbrand Vroegop, with roots in the Netherlands and residing in Singapore, wrapped up with the final words: All speakers were looking at opportunities to cooperate and learn from the two clusters, while at the same time stay competitive. Joint efforts in both industry and government for the maritime clusters are needed – a clear agenda in both Singapore and the Netherlands will help to get the sector ready for the sustainable shipping century.
Via this recap, SSA and RMSC would like to thank all speakers and audience again, the two organisation say a great cooperation – looking forward to continue and expand the connections in 2022!