Shipping needs to get smarter

Posted on Thursday, September 10, 2015

Rising star of forecasting, Affinity Research chief Mark Williams, spells out a brave new world for the industry

Shipping is set to undergo a huge sea change in fuelling and operations over the next 20 years, Affinity Research managing partner Mark Williams told a London International Shipping Week seminar.

Speaking at an Institute of Chartered Shipbrokers event on Tuesday evening Williams flagged up December's upcoming global climate change conference in Paris as a key game changer.

He said there is a strong chance that this will result in a proposal to cap carbon emissions and to achieve this there will be a need to de-carbonise economies. "The decisions made will directly affect the way shipping operates," he said.

By 2020 regulations are likely to change the way our industry is fuelled and policed, Williams said.

In the future ships will automatically send details of their emissions to land-based authorities in a similar way to how the current AIS system constantly updates vessels' positions, he explained.

LNG and dual fuelling will begin to take off, on the back of the current early moves on this for ferries, containerships and LNG carriers.

Williams said other new fuels such as methanol will become cheaper and more widely available on the back of the growth of US shale gas production and there is going to be encouragement to switch from more polluting alternatives.

Gas turbine research will continue and become cheaper, which combined with the greater availability of LNG, will further encourage a shift.

"One of the things that is going to impact the shipping industry is that carbon taxes will be implemented on a national or a regional basis," Williams said.

By 2025 the new research chief said the watchword for the shipping industry will be telemetry and efficiency.

The carbon tax regime by this time may well have gone global and there will be many more ships running on LNG.

More methanol ships

Williams forecasts there will also be more methanol ships, the first prototype hydrogen-powered vessels and some "lively debate" on nuclear powered non-military ships.

He said that as renewables technology becomes more efficient and cheaper the industry will also see many more energy saving devices on ships.

"This is all going to have a big effect on the way ships are operated," Williams said. "The ship's engineer by 2025 might be a chap in a white shirt and tie sat in an office in Neasden, Zanzibar or Montevideo or anywhere," he said. "GPS will have evolved into two-way telemetry. People are going to have a much greater input over ship performance from onshore."

In a telling example Williams said the Port of London Authority is now close to hiring its last generation of seagoing pilots. By 2025-2030 their jobs will be done ashore.

Shifting on to 2030, Williams said global LNG bunkering will be well established and even "old hat" by then.

By this time most voyages will be capable of being automated, he suggests.

Even further out by 2035, he forecasts that the last generation of fuel oil ships will be under notice of phase out and the first generation of hydrogen ships will be in service.

"The way we run the shipping industry is going to change enormously," he said.

Williams questioned whether in an age of globally connected mature maritime clusters like London will survive and said this is likely to be dependent on whether they are prepared to be early adopters of new technology, their regulatory and tax regimes and local demographics.

New clusters could form, especially with the southward shift in trade patterns and existing centres will need to compete with this.

Shipping is estimated to generate around $22bn of value to the UK, Williams said. But the UK satellite industry contributes about $40bn and is growing at about 7% per year.

"If you think that that is not going to impact on shipping at some point over the next 20 years then I would suggest you are deluded", Williams said. "It's going to change the way we work."

Lucy Hine, London, 09 September 2015, 09:41 GMT