Category Archives: Supply Chains

No green shipping corridors without landside infrastructure

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.

Marcus Hand | Nov 30, 2022

No green shipping corridors without landside infrastructure

Mississippi barge quagmire leaves exporters looking for alternative routes

Low water in the Mississippi river is hampering barge traffic. This river is a main pathway for soybean exports, which travel downriver to the New Orleans area to be loaded for the Far East.

Barge traffic is much cheaper than rail or truck. For agricultural exports, cost is the main thing to email competitive with Brazil, the largest competitor. While the voyage from Brazil to the Far East is days longer than from the US, and Brazil’s inland infrastructure is not as developed as the US, the final product, soybeans, is about the same price today.

The situation is complicated by the fact that the US harvest in October is diametrically opposite that of Brazil, which is in the Southern Hemisphere. So a large buyer like a Chinese pig farmer or processing plant tends to buy from whoever is cheaper, which is usually who has just completed the harvest. Beans are cheapest when the harvest comes in, because it costs money to store them, and losses of quality and spoilage occur in storage. Farmers store only when they think the current price offered is too low and they believe it will go up.

There is also hedging. Elevators can sell beans for future delivery, which means a contract for a fixed quantity and quality to be transferred to the new owner at a later date. This can be called hedging. It’s a good thing for farmers and bean consumers like processors alike. They can control their cost or gain. While there are speculators for any agricultural commodity, they have to outguess the actual price performance of the market, and that is hard to do.

But back to the logistics. The state of the Mississippi locks has been an issue for many years; the locks are old, and some have not been kept in good repair. It’s the responsibility of the US Army Corps of Engineers to maintain the locks, but for years Congress failed to vote enough funds to keep up the repairs. However, since the supply chain crisis following COVID, Congress’s attention came around, and money is now flowing more freely.

But it isn’t much help if the rain stops coming. A drought in the central US means the water level in the Mississippi River has dropped to levels so low that barges are restricted from carrying full loads. the effective draft allowed is just over 9 ft, which means a loss of carrying capacity for barges. So farmers and grain elevators cannot get enough grain to market especially abroad.

The situation is dire enough for farmers to choose to ship by rail to the West Coast for transport by bulk carrier to the Far East. But with the problems rail transport is having right now, it’s hard to pull off. Railcars and trains simply aren’t available. It’s a version of the blanking of sailings we see in container transport today. Railroads are running fewer trains, so shipments occur less often. The trains are longer, so the turnaround time for the cars is slower. There is a strike of rail workers pending. And rail crews have been stretched thin by precision scheduled railroading (PSA), a form of lean operation that seems not to fully take into account the needs of customers.

It’s quite a dilemma, and there are no easy answers. Wish it would rain!

By Ian Putzger, Americas correspondent 02/11/2022

Mississippi barge quagmire leaves exporters looking for alternative routes – The Loadstar

Emissions soar at Port of Los Angeles in 2021

Last year the increase in emissions at the Port of Los Angeles was due to the extreme congestion at the port. ships were stacked up nearby, waiting to unload. And congestion in the terminals also created more truck waiting.

Fortunately, the particulates and lesser pollutants did not rise too much, and ramain=ed below the target levels.

We can expect improvement in 2022, because of the congestion relief we are seeing now.

Marcus Hand | Oct 07, 2022

Emissions soar at Port of Los Angeles in 2021