The Lloyd’s List Podcast: How does an economist solve shipping’s climate conundrum?
Listen to the latest edition of the Lloyd’s List Podcast — your free weekly brief-ing on the stories shaping shipping
Two of the shipping industry’s leading academics, Professor Siri Pettersen Strandenes and Dr Martin Stopford, join the podcast this week to discuss everything from the shifting nature of shipping economics to the digital and logistic solutions they would urge the industry to consider in response
IF it were possible to weigh the collective hot air expelled discussing future fuels versus the expended efforts improving current efficiency, there would be a noticeably heavy imbalance.
That is because the low hanging fruit was picked several years back and the nitty gritty of overhauling contracts, investing in genuine digitalisation and taking a holistic stab at integrating a global value chain is really quite tricky and eye-wateringly expensive.
For all the hand-wringing about a flawed efficiency approach from the International Maritime Organization’s Carbon Intensity Indicator, the real issue is the fact that the commercial architecture of the shipping industry makes real efficiency difficult to achieve.
The split incentives between owners and operators and the industry’s devotion to the asset game often make it challenging for solutions to known problems to be implemented.
Essentially we are in an industry that rewards inefficiency.
Endlessly complaining about how the fuels you cannot buy to run on engines that are not yet available are going to represent a fundamental shift in the economics of the business, is far easier than tackling the difficult, but achievable overhauls required to make shipping more efficient, rather than just low carbon.
We mention all this as context to this week’s conversation, because the Lloyd’s List Podcast had the honour of attending the Onassis prize lecture this week, where a faculty of international academics gathered in London to debate their research into the state of shipping and global trade. Unsurprisingly, the climate debate, along with the threat of deglobalisation, came up in conversation once or twice.
For those of you not aware of the Onassis event, this is essentially the maritime trade equivalent of the Nobel Prize. They are awarded every three years by the Onassis Foundation, London’s Bayes Business School and its Costas Grammenos Centre for Shipping, Trade and Finance.
One of the three winners this year was Professor Siri Pettersen Strandenes of the Norwegian School of Economics, who was honoured by a panel of academics for her substantial body of work, which includes research into maritime freight rates and the effect of environmental regulations on shipping.
She joins that other rock star of maritime economics, Professor Martin Stopford, for this week’s conversation, where two of the industry’s leading academics discuss everything from the shifting nature of shipping economics to the digital and logistic solutions they would urge the industry consider in response.