Whenever something seismic happens in shipping the industry’s instinct is to turn to Clarkson Research’s former president, Dr Martin Stopford, to make sense of it.
Readers will recall the heady period in the 2000s when – for some at least – earnings appeared to defy gravity. As Dr Stopford explained at the time, four factors converged to create an unprecedented boom: voracious Chinese demand; the low cost of capital; a global fleet in need of renewal; and regulation compelling change. Ordinarily, just two of these factors coinciding would be enough to stimulate a boom.
How things have changed. COVID-19 has laid low the global economy and brought layoffs and layup to parts of our industry.
What prospect for the sector and the world at large? Enter Dr Stopford. Speaking as a panellist at an April Webinar organised by Maritime Bergen and NCE Maritime CleanTech and themed ‘decarbonisation of deepsea shipping’, Dr Stopford was joined by Norwegian head of delegation to the IMO, Sveinung Oftedal and member of the European Parliament for Alliance 90/The Greens, Jutta Paulus.
“We are going into a 30-year [period] where the changes will be similar to that when changing from wind to steam”
Dr Stopford presented three scenarios: the first saw the global economy firing on all cylinders by the end of the year, with growth returning in 2022; the second saw a return of the virus by mid year – only in 2023 would major economies return to something approximating business as usual, with maritime trade following in 2024 at the earliest; the third saw the current lockdown lasting three years, with stark consequences for the global economy and global trade.
Given this varied outlook, what should the maritime industry do to maintain its decarbonisation ambitions which – whatever the economic weather – cannot afford to abate.
Here Dr Stopford posited that investment should be made in waves. The first such wave would see diesel-driven vessels slow steaming. The second envisages the further development of low emission dual-fuel and gas propulsion driving the uptake of hybrid/battery powered vessels and digitalisation. The third will see zero carbon and all electric becoming mainstream.
“We have had 30 years in shipping where things have not changed very much,” he told a captivated audience. “Now we are going into a 30-year [period] where the changes will be similar to that when changing from wind to steam. Our task is to find a way forward that works both commercially and technically.”
The Oracle also left his Norwegian hosts – and the rest of us – with the following encouraging parallel. When Norway transitioned from sail to steam in the early 1900s it did so against a backdrop of the Spanish flu and economic depression.
Or as another great oracle – Mark Twain – reportedly put it: “History doesn’t repeat itself, but it often rhymes.”
Riviera will host a series of 45-minute webinars on subjects ranging from maritime propulsion to vessel optimisation, ballast water management, maritime air pollution and maritime leaders among many others commencing 5 May 2020. Find a list of the webinars and register your interest now