Green shipping corridors are the latest effort to create strategies for ESG compliance, particularly environmental, for the global shipping industry. These corridors are starting to show up in the planning stages. The intent is to create a connected system of ports that have all the improvements necessary to allow those ships using it to achieve a high level of compliance with green shipping standards.
That means the availability of fuels that meet international green standards such as those of IMO 2022, as well as green technology for loading and storage of containers and other products; and yard equipment that meets green operating standards.
Of these perhaps ensuring the availability of the fuels required is the most challenging. Availability alone is not enough; the price must be competitive, and sufficient storage must be in place; and long-term availability must be assured. The variety of fuels now under consideration for green ocean transport is a challenge. In addition to LSFO, some ships will soon require green methanol; major players such as Maersk and CMA-CGM are investing in methanol-powered ships. And recent studies have shown that fuels can burn greener, but the means of their production and storage have to be included in the fuel evaluation. An interesting study of this was made by Bureau Veritas (BV), a classification society, which described in detail the greenness from well to wake of a wide variety of power options from biodiesel and HS/LSFO to methanol and ammonia. Not all of these are easy to make and store.
So infrastructure will be incredibly important for the green corridors.
Some newly-announced corridors start from Singapore, which already has a large fuel infrastructure, and is a globally important financial center for dealing in fuels. That will be a tremendous advantage. European ports like Rotterdam and American ports like New York already have quite a bit of financial and storage infrastructure. These ports are already part of announced green corridors. However, even at these developed ports some of the alternative low emissions fuels are not available, nor is there the handling capability present.
The interview with the CEO of GCMD casts useful light on what’s needed.
Prof Lynn Loo, CEO of GCMD, in an interview at TOC Asia.
Much of the focus in decarbonising shipping is on the vessels, however, without developing landside infrastructure projects such as green corridors cannot take off.
Deep sea box ports are a good idea. They don’t take up valuable land space, and they don’t pollute regions where people live. They’re cheaper to build, and can be connected by rail and truck to land.
My colleague Alf Baird recommended these years ago.
This idea for one has an additional advantage– it will be powered by tidal flows, which can generate the electricity to run the port in a green fashion. Done properly, it might also power lots of homes or industrial spaces in the adjacent area.
I hope they get the investment funds and find some customers willing to commit.
Obtaining a chassis from a pool is a good idea for some truckers. But beware the terms and conditions. The article indicates that pools, often owned by leasing companies and investment houses, have a goal of making money. I believe the biggest risk of renting from a pool is that the pool may be cheating on maintenance, so the chassis you pick up may have deficiencies that show up during the trip. In that case, the trucker must fix it at her expense. It’s always true that who is in possession of the chassis is required to pay for fixing the problems that occur on the trip.
Some pools, such as the one in SoCal connected with the ports, have union workers doing the maintenance. There’s probably less risk of under-maintaining chassis there. But privately operated pools have an incentive to cheat on the maintenance, because they can lay it off on the truckers.
And there is information asymmetry. There are few figures on the incidence of repairs for chassis from various pools. Such real data would inform everyone whether a pool is doing enough preventative maintenance. But without such data, it’s just a gamble for the trucker.
The article claims carriers are better off purchasing their own chassis. But I’m not convinced. Owning the chassis requires an upfront expense, or a lease, which is money out the door. If you buy the chassis you will need to put it to use often to recover your investment plus your profit. You now have to do all the maintenance. And chassis vary for different needs; a chassis for forty-foot ocean cargo won’t fit twenty-foot ocean cargo; or you might need a reefer-compatible chassis. Unless you have high predictability, you are better off taking what you need for each load.
My understanding of the situation in Europe was that chassis were mostly owned by the large drayage firms. That prompted the movement several years ago by ocean carriers in the US to divest themselves of chassis, to try to get the truckers to own them as in Europe. But as the author points out, most drayage drivers in the US are owner-operators, and don’t work for a large firm. They can’t support the capital expense of a chassis unless they are convinced that they will be able to employ the chassis for money on most loads. We did a paper on this in 2014. They would need to believe that they could almost always get paid for using the chassis. But that isn’t the way it is; somewhere around 40% of all cargoes come with a chassis provided by the ocean carrier. And that is going up nowadays, with ocean carriers getting into last-mile and end-to-end delivery promises.
So I wonder. But there should be ways to make maintenance data more visible, and make it easier for truckers to dispute charges for chassis repairs if the repairs should have been done at the pool first. I’m afraid that will be quite a while coming, though.