2020: Shipping in a decade of change

Peter Nuttall
Micronesia Centre for Sustainable Transport


This article was written a year before appearing on this blogsite.

As we begin a new decade, the Sun is asking what 2020 heralds for Fiji’s shipping future? Shipping, especially our domestic sector, is facing major challenges.

We are a maritime nation. Our fleet of commercial vessels - from outboard-driven village fibers, barges, landing craft, tourist vessels, to large passenger/cargo ferries - is the very lifeline connecting our more than 300 islands. Like other Pacific Islands states, we have long shipping routes, sometimes hundreds of nautical miles, to service relatively small communities. It has always been a relatively high-risk business and margins, especially for our remote and most vulnerable communities, are thin.

High fuel prices, an often-aged fleet and a large scattered infrastructural footprint, have always presented major challenges to both government and private sector operators alike. There are major systemic underlying issues with ship financing and insurance underwriting to resolve. And on top of this, shipping emissions has now become a major issue in climate change negotiations.

2019 saw a steady flow of articles in the Sun that signal major changes now face the domestic shipping industry in Fiji. At a global level there is climate change. Shipping is a carbon emitter at the scale of a country the size of Germany and Fiji and Pacific diplomats have been highly active in climate negotiations. In response the International Maritime Organisation, the UN agency that regulates shipping, has set a target for emissions reduction of at least 50% by 2050.

This is now resulting in an unprecedented investment by large scale shipping in new technologies, fuels, ships and operating practices. It will be largest technology shift for our sector since the move from sail to coal. Fiji and the Pacific can choose to be part of that transition or be left behind risking ever increasing financial penalties and poorer shipping services.

At the UN Climate Summit in New York last June, Fiji and our neighbours in RMI announced new and highly ambitious domestic shipping emissions targets, zero-carbon by 2050 with a 40% reduction by 2030. How can this be achieved? The governments’ have launched the Pacific Blue Shipping Partnership, a call for a $500m investment in domestic shipping technologies to transition a number of Pacific countries to low carbon shipping over the next ten years.

What does all this mean for our domestic ship operators? Will they be ready and able to respond to this level of change in the industry? Already in 2020 we have run stories on Goundar Shipping and their plans to import more vessels to their already considerable fleet. How will these ships help meet Fiji’s new emissions reduction targets? Will these be new ships? Or more old gas guzzlers. Are we investing in the right vessels for the future?

Also last week, smaller shipping operators reported that they are being squeezed out by the bigger players, yet some are saying they provide a more effective service. What does decarbonising shipping mean for smaller operators? What are the alternatives to diesel and 2-stroke for the myriad of fibres and landing craft and barges that make up the ‘last mile’ operators? Are electric outboards and inboards a reality? Can they be introduced economically? What changes are needed to our service industries to support such a change? How does the government design the correct enabling environment to drive change?

And then last week came Goundar’s announcement of importing Filipino seafarers to meet a manning shortage. Is this a short-term measure to address an immediate crisis or a long-term solution? Perhaps the industry is correct, and it is no longer possible to train and retain a Fijian merchant marine workforce. That would be very sad day indeed and be the end of a proud tradition of Fijians excelling at seafaring that goes back over thousands of years.

With the World Bank reporting youth unemployment at nearly 15%, we need to ask what enabling environment the industry needs to provide to ensure a steady supply of professional and motivated seafarers to their ships. Surely, an able and responsive crew are the greatest asset of any responsible ship operator. But they need to be adequately compensated for their service and provided with the security of clear career pathways.

Surely, in a carbon changing world we need to be planning to change our business model to one that invests in more efficient shipping and is rewarded with reduced optional cost and increased transport work. Is there a risk of missed opportunity if government and industry don’t work out how to work together?

The international investment in maritime technologies is unprecedented. Last week the CEO of Nor-Shipping responded to research that a $1trillion global investment is needed as this being the greatest economic investment opportunity in shipping’s history. In December, the International

Chamber of Shipping announced a proposed $5billion R&D fund to drive innovation. So far, all of this is targeted at large scale shipping servicing the worlds trading capitals. Again, Pacific diplomats are actively working to ensure the needs of our island states and other climate vulnerable countries are not excluded.. There are not many silver linings coming from climate change. The opportunity to use climate finance to move to new generation shipping is one. But only if are ready and prepared to seize the opportunity. It will not be risk free.

The 2020’s are shaping up to be a decade of change for our shipping industries. It is critically important debate and it essential that all stakeholders – industry, government, seafarers, trainers, private sector, investors, suppliers – engage if we are to find the best path forward for Fiji.

There are still more questions than we have answers for! New research, innovation, information is coming out both internationally and locally in the search for solutions. In coming weeks, the Sun will bring you the latest news and research from home and abroad. Welcome to 2020.

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