Shipping Industry Faces Tough Choices Under New FuelEU Maritime Regulations

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Shipping Industry Faces Tough Choices Under New FuelEU Maritime Regulations

August 18th, 2024 Tim Jay Leave a comment

As the implementation of the FuelEU Maritime regulation approaches, shipping companies are grappling with the challenge of meeting stringent carbon intensity reduction targets or facing escalating penalties. Set to take effect on January 1, 2025, the regulation imposes progressively tighter limits on the greenhouse gas (GHG) intensity of energy used on ships, with the requirements becoming stricter every five years.

The GHG intensity standards apply to all energy consumed during voyages and port calls within the EU, as well as 50% of voyages entering and leaving the EU. To comply, shipping companies must either pay a FuelEU penalty or take steps to reduce their GHG intensity to meet the regulation’s limits. This can be done by using alternative fuels such as biofuels or LNG/LPG, or through pooling, where vessels that exceed their targets can offset those that underperform.

However, Albrecht Grell, Managing Director of Hamburg-based maritime intelligence firm OceanScore, noted that many shipping companies, particularly smaller ones, are opting to pay the penalty rather than explore pooling. He cautioned that this strategy, along with deferring compliance through borrowing that incurs interest, will become increasingly expensive over time.

Currently, the penalty for exceeding GHG intensity targets is €2,400 per tonne of VLSFOe (very-low sulphur fuel oil). This penalty is set to increase by 10% each year for continued non-compliance, reaching €3,360 in 2029, according to OceanScore.

Grell advised companies to consider biofuels and pooling as more cost-effective options to reduce compliance deficits. He emphasized the importance of understanding the market dynamics that influence the availability and cost of pooling slots, as well as the potential to monetize compliance surpluses by sharing them with third-party vessels.

Friederike Hesse, co-founder and Managing Director of maritime carbon solutions platform zero44, added that the most economical approach to compliance will vary by company. Factors such as trading patterns, exposure to the EU, availability and cost of sustainable fuels, and agreements with stakeholders will all play a role. Hesse stressed that optimizing FuelEU compliance will require ongoing effort, with companies needing to track their options and find the best strategy for each compliance period.

As the deadline nears, shipping companies must carefully weigh their options to navigate the new regulations while minimizing costs.

Global Logistics, Global Trade Daily, Uncategorized

Maritime Transport Cut Sulfur, but then came the Climate Downside

July 29th, 2024 Peter Frerichs Leave a comment

In January 2020, the International Maritime Organization (IMO) enforced new emissions standards intended to cut global maritime vessel pollution. A major undertaking that had been years in the making, the IMO had pledges from countries across the developed and developing world, rendering the initiative perhaps the greatest collaborative environmental achievement to date.

The most commonly used marine fuel at the time was estimated to have approximately 2.7% of sulfur content. The IMO’s objective was to ban those vessels with a sulfur content higher than 0.5%, and over 170 countries enthusiastically agreed.

Yet, a recently published paper in Communications Earth & Environment suggests that the impact of the clean air regulations could very likely be an “inadvertent geoengineering event.” In short, it could have aided in boosting, not lowering, global average temperatures over the past 2 to 3 years.

The shipping industry has long been under pressure to reduce sulfur emissions. The pollutant is an element of acid rain, which contributes to the acidification of the oceans, harming wildlife and vegetation. Yet, the same pollutant reacts with water vapor to create aerosols that reflect sunlight back into space. These aerosols, at high levels, have a cooling effect, and some researchers are positing that the pre-IMO enforced emissions could have helped mitigate the warming effect.

Last year’s record-breaking heat was extreme. Most of the world’s scientists cite 2023 as the hottest year on record, and the IMO rule change resulted in an 80% reduction in sulfur dioxide emissions. While much research remains, a decrease in sulfur emissions is just potentially one factor of why 2023 was so hot. The El Nino weather phenomenon caused a spike in global temperatures and the undersea volcanic eruption of Hunga Tonga was a highly unusual event estimated to have had an impact on the warming of the Earth.

The study is being treated with great caution. The positive health impacts alone from less pollution are undoubtedly improved with a cutback of sulfur. However, should this end up being an “inadvertent geoengineering event,” the ripple effects on the larger environmental movement will be noticeable.

Global Logistics, Global Trade Daily, News

An Exclusive Interview With International Maritime Organization Secretary-General Arsenio Dominguez

May 27th, 2024 Robban Assafina Leave a comment

Arsenio Dominguez assumed the role of Secretary-General of the International Maritime Organization (IMO) with a vision centered around transparency, inclusion and diversity. In the face of evolving challenges within the maritime industry, ranging from climate change to security threats, he emphasizes the need for efficiency, resilience and forward-thinking.

Drawing on his extensive experience as a former delegate and chair of key IMO governing bodies, Dominguez aims to guide the organization through a progressive era, fostering international collaboration and concrete change. The following interview carried out by Robban Assafina explains this vision further.

Robban Assafina: First of all, congratulations for your new role; what is your main vision for the International Maritime Organization as the Secretary-General?

Arsenio Dominguez: The maritime industry is rapidly changing, even as it faces multiple global challenges, from climate change impacts to threats to peace and security. It must be efficient, robust and forward-looking to survive and thrive. I look at the next four years as being an era of progression for IMO, driven by a commitment to transparency, inclusion and diversity.

I’m determined to apply all my experience as a former delegate, a negotiator and chair of main IMO governing bodies to support the IMO decision-making process and reach agreements, even when that sometimes involves difficult discussions. The Organization has a long track record of bringing about concrete change through its international instruments, regulations and technical assistance programs—I intend to amplify this trend.

RA: Can you highlight a few key initiatives you plan to undertake to advance the goals and mission of the IMO?

AD: I have outlined four strategic priorities for the Organization: our work, our support, our image and our people. I will focus on a more targeted and measurable implementation support to our Member States, in particular developing States, with emphasis on small island developing States (SIDS) and least developed countries (LDCs). I aim to elevate IMO’s global profile and reputation as a trusted, expert partner—both within the maritime sector and beyond—as well as a champion for the shipping industry.

My goal is to transform the Organization into a magnet for world-class talent and a center of influence that the finest minds aspire to be part of.

RA: In light of rapid technological advancements, how do you see the IMO embracing digitalization to enhance safety, security and efficiency in the shipping industry?

AD: Technological advancements are unfolding rapidly in the maritime industry. The First of January 2024 marked a milestone in the acceleration of digitalization in shipping, as new requirements have come into force that make it mandatory for governments to use a single digital platform or “Maritime Single Window” to share and exchange information with ships when they call at ports. This will streamline procedures to clear the arrival, stay and departure of ships and greatly enhance the efficiency of shipping worldwide.

Another focus area will be regulating the commercial use of autonomous ships. These are vessels that operate independently of human interaction, whether controlled remotely or fully autonomous. Such advancements require robust regulation to ensure the safety of life at sea, as well as of cargo on board and of the vessel itself. IMO is working to develop a Code for Maritime Autonomous Surface Ships (MASS) which balances the benefits of new technology against safety, security and environmental concerns, as well as the impact on international trade facilitation and on personnel.

RA: With ambitious global targets to achieve net-zero emissions, what specific initiatives or regulations is the IMO prioritizing to accelerate decarbonization within the maritime industry by 2050?

AD: Decarbonization of the maritime industry is one of our highest priorities at IMO. It is a huge challenge but also an opportunity to make the sector more sustainable and aligned with global commitments on climate change. The pathway to net zero has been adopted in the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which sets clear targets and check points for emissions reductions. Member States are currently discussing mid-term measures to deliver on the reduction targets, including a global fuel standard and a pricing mechanism for GHG emissions. Member States have committed to adopt these measures in 2025.

RA: What role do you see the IMO playing in supporting the development of maritime education and training programs globally?

AD: The shipping industry requires an adequate supply of seafarers to operate the 50,000 ships that are travelling on the world’s oceans at any given time. We need to encourage new generations of young people to take up seafaring as a career, as well as address the gender imbalance in maritime education and seafaring training.

The basis for seafarer training is the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978, which is undergoing a comprehensive review to ensure the competencies within the Convention and the Code are adapted to new technical developments in shipping, environmental protection and climate change.

IMO validates an extensive series of model courses to support training institutes across the globe to deliver high-level training and conducts regular train-the-trainer programs on specific areas. With the Maritime Just Transition Task Force, IMO is engaged in a collaborative project that is setting the framework to equip seafarers with skills as the shipping industry transitions to zero emissions. The project is set to develop a training framework to equip seafarers with skills as shipping transitions to zero greenhouse gas emissions.

These are just some examples of how IMO supports maritime education and training. Further, we have the IMO-founded maritime training institute: The World Maritime University and International Maritime Law Institute, which over several decades have trained high level (Masters and above) students from all over the world in maritime affairs.

RA: What steps will you take to address challenges in international shipping that may impede smooth trade flows?

AD: Shipping is the backbone of international trade, but geopolitical tensions and threats to maritime security can hinder smooth trade flows and threaten the right to freedom of navigation. The attacks on international shipping in the Red Sea area are a clear example. In such situations, it is vital to work closely together with governments, partners in the industry and the international community to de-escalate tensions and ensure the protection of seafarers, ships and cargoes. Ships must be allowed to trade worldwide unhindered, in accordance with international maritime law. We must advocate for the safety of seafarers, who are innocent victims in these situations.

RA: How do you plan to balance economic considerations with environmental and social priorities in your decision-making processes?

AD: In all of our decision-making, we seek to balance economic, social and environmental concerns. This reflects our commitment to the Sustainable Development Goals, which take a harmonized approach to these three crucial elements.

I have always believed that it is essential to engage all sectors of society in decision-making processes that affect them, and I will continue to ensure that there are ample opportunities and avenues for governments, industry and civil society to raise concerns and provide input into discussions of decision-making bodies. We also arrange forums for discussions, commission expert studies and invite submissions on various issues.

Robban Assafina is a Lebanon-based regional maritime media platform that has been sailing in the maritime reporting and networking space since 2009, with direct connections to regional and international decision makers.

Global Logistics, Global Trade Daily, News, United states news

MARAD Announces $4.8 Million Funding Opportunity for U.S. Marine Highway Program

May 25th, 2024 Tim Jay Leave a comment

In a recent announcement, the U.S. Department of Transportation’s Maritime Administration (MARAD) unveiled a Notice of Funding Opportunity, making $4.8 million available for Fiscal Year 2024 through the United States Marine Highway Program (USMHP).

The USMHP aims to enhance the movement of freight via America’s navigable waterways, presenting an efficient, sustainable alternative to road and rail transport. This initiative not only strengthens national supply chains but also reduces emissions and alleviates congestion.

Since its inception, the Marine Highway Program has distributed over $103 million to public and private organizations, fostering maritime transport options and funding essential freight infrastructure to bolster supply chain resilience.

The program’s evaluation criteria include the impact on goods movement, non-federal funding investment levels, project readiness, climate change and sustainability considerations, equity, and workforce development.

Applications must be submitted through grants.gov by 11:59 p.m. EST on July 12, 2024. For additional information, visit the USMHP website here. Potential applicants may also contact the USMHP staff via email at mh@dot.gov or by phone at 202-366-1123.

Global Logistics, Global Trade Daily, International Trade, News

Panama Canal Crossings Resume, Full Normalization Still Pending

May 21st, 2024 Tim Jay Leave a comment

Liner services impacted by recent restrictions on Panama Canal transits have returned to regular operation this month. The affected services include THE Alliance’s Asia-US East Coast routes, MSC’s Santana service, and the Asia-US East Coast service managed by Hapag-Lloyd and Wan Hai Lines.

These services were forced to reroute through the Suez Canal and then the Cape of Good Hope following the Red Sea crisis at the end of 2023. However, with the increase in Neo-Panamax transit slots at the Panama Canal from May, carriers are restoring these routes to Panama, reducing overall round-trip transit times by one to two weeks.

THE Alliance had to omit 37 sailings since the end of 2023, while MSC resumed westbound sailings for the Santana service on May 9, with a new rotation bypassing the US East Coast to prioritize Central America. Hapag-Lloyd and Wan Hai restarted westbound transits on May 7.

Peter Sand, Xeneta’s chief analyst, noted that although the increased canal transits have not fully resolved the tonnage shortage caused by vessel diversions, the situation is improving. He stated, “On June 15, another slot opens for Neo-Panamax transits, which is another step in the right direction. More importantly, it’s about bringing the draught restrictions back to 50 feet, allowing fully laden boxships to transit.”

Simon Heaney, senior manager of container research at Drewry, pointed out that while canal transits hit a six-month high of 26.3 in April, daily boxship transits averaged seven in April, down from 8.4 in October. Heaney explained, “The easing of restrictions to the Panamax locks hasn’t significantly changed container ship flows through the canal since the sector typically uses the Neo-Panamax locks. Currently, the maximum draught is 44 feet, whereas normal conditions allow for 50 feet. It’s estimated that container ships lose approximately 350 TEU for every foot of lost draught.”

While the situation at the Panama Canal is improving, it will take more time and adjustments, including lifting draught restrictions, for full normalization of operations.

Global Logistics, Global Trade Daily, News

Maritime Community Convenes in Athens for Poseidonia 2024 World Expo

May 11th, 2024 Tim Jay Leave a comment

Gathering in Athens for the Poseidonia 2024 World Expo, the maritime industry is poised to delve into crucial issues shaping its trajectory. With over 65 seminars and conferences scheduled from June 3 to 7, the event promises robust discussions on the future of shipping.

Drawing attention from across the globe, Poseidonia will host representatives and experts tackling diverse topics essential to the industry’s evolution. Notably, the Tradewinds Shipowners Forum, a hallmark of Poseidonia, will examine a new model addressing geopolitical shifts, economic uncertainties, and environmental concerns.

Distinguished leaders such as Katerina Bodouroglou and Evangelos Marinakis will lead discussions on adopting new technologies and sustainable fuels, emphasizing their economic viability. The HELMEPA Conference, coinciding with World Environment Day, will further explore sustainability and climate issues, offering strategies for industry-wide adoption.

The Greener Shipping Summit 2024 will spotlight next-generation ship management, technological advancements, and educational initiatives for a greener maritime sector. Meanwhile, the Maritime Leaders Summit, themed “Dashing Ahead – Leadership in Action,” will unite Greek and international shipowners to address critical industry challenges.

Addressing geopolitical tensions and supply chain disruptions, the Marine Insurance Greece Conference will convene industry experts to navigate current marine insurance challenges. Notable events include seminars on nuclear energy in shipping, crew management insights, and Poland’s role in the maritime industry.

From discussions on commodity dynamics to enhancing ferry travel experiences, Poseidonia 2024 promises a comprehensive exploration of the industry’s future. With a focus on innovation, sustainability, and collaboration, stakeholders converge in Athens to chart a course for maritime excellence.

red sea global trade, houthi attacks, red sea attacks, red sea crisis, houthi rebels

Global Logistics, Global Trade Daily, International Trade, News

How The Red Sea Disruption Is Affecting Industry

March 29th, 2024 Andrew Thompson Leave a comment

With several big shipping companies diverting their routes away from the Red Sea due to current conflicts, the delivery of shipping containers and consumer goods is taking longer than usual.

As a result of the ongoing Israel-Hamas war, the Houthi group in Yemen – who is openly backing Hamas – has said it is attacking all ships heading towards Israel. However, it is unclear whether all the targeted vessels are actually travelling to Israel, meaning many shipping firms have opted to avoid the busy shipping lane altogether.

In fact, over the past few months, a number of Maersk and MSC container ships have been assaulted by Houthi rebels, which has reinforced the importance for shipping companies to map out alternative routes for the security of their crew members and container cargo.

So, what does this mean for businesses awaiting commercial deliveries? Cleveland Containers, one of the UK’s leading suppliers of shipping containers, explains how the Red Sea disruptions are affecting industries across the country.

What is happening in the Red Sea?

Since the beginning of the Israel-Hames conflict in October, Houthi rebels have been launching rockets and drones against foreign-owned ships navigating through the strait of Bab al-Mandab. This is a 20-mile wide channel separating Yemen on the Arabian Peninsula side and Eritrea and Djibouti on the east African coast.

Andrew Thompson, Chief Executive Officer of the Cleveland Group, which consists of Cleveland Containers, Cleveland Hire and Cleveland Modular, said, “Generally, ships enter the strait of Bab al-Mandab from the south to cross the Red Sea and reach the Mediterranean via Egypt’s Suez Canal.

“But the threat of potential attacks has forced global shipping firms to amend their itineraries, with vessels now cruising around the Cape of Good Hope (South Africa) and then all the way up the west side of the continent.

“This is causing severe delays to shipping deliveries, as the alternative route can extend transit times to at least two or three weeks. And, in turn, the delays are also having a knock-on effect on the operations of sectors and companies all over the UK, impacting stock availability and delivery pricing.”

What sector is being affected the most?

Many sectors, such as retail and construction, are being significantly affected by the Red Sea disruptions, as companies deal with supply chain logjams due to the rerouting of deliveries.

Manufacturing is no doubt one of the industries that has to tackle the harsh consequences of the ongoing situation, too. For example, at the start of 2024, big automakers such as Volvo, Tesla, and Suzuki had to suspend some production across Europe because of shortages in components.

In particular, the UK manufacturing sector has witnessed a decline in operations in recent times, and the Red Sea problems have contributed to hindering the situation even further. As of January 2024, its purchasing managers’ index (PMI) stood at 47.0, with any reading below 50 indicating a contraction.

The current delays are prolonging expected deliveries, causing disruptions to production schedules and increasing financial pressures at a time when companies are already struggling to make ends meet.

The additional costs behind the Red Sea disruptions

The ongoing disruption in the Red Sea means that the cost of delivering goods worldwide is increasing, too.

The forced change in route has increased sailing times by 30%, leading to a rise in fuel consumption and extended work shifts for ship crews.

Not to mention that shipping companies are facing additional port fees as vessels need to stop more often along the way, as well as higher freight expenses overall.

So, ultimately, this is why businesses across the UK are currently having to spend more money on the delivery of products, items, and materials to keep their operations going.

It is also worth noting that the delays of goods leaving China and other parts of the world are escalating demand and impacting availability. Some sectors might be experiencing significant stocking issues, whereas others may not have the materials they need to fuel their industrial processes.

In short, the Red Sea disruptions are causing a slowdown in production, resulting in lower output and an overall loss in revenue for companies all over the country.

As things stand, the threat of Houthi attacks on vessels in the Red Sea is setting back transit times, increasing shipping costs, and putting the financial wellbeing of several sectors to the test.

While it is difficult to make predictions at this stage, the hope is that the situation will ease over the coming months to restore some sort of normality worldwide.

Global Logistics, Global Trade Daily

Nuvera Fuel Cells and HELINOR Energy Join Forces to Develop Zero-Emission Marine Power Solutions

January 12th, 2024 Tim Jay Leave a comment

Nuvera Fuel Cells, a leading provider of fuel cell power solutions, has formalized a technology development agreement with HELINOR Energy, a Norwegian technology and production provider specializing in next-generation hydrogen fuel cell and fire suppression modules. The collaboration aims to develop scalable zero-emission energy solutions for maritime applications, with HELINOR funding the integration of Nuvera’s next-generation high-power fuel cell engine technology into the maritime industry.

As the demand for zero-emission solutions in shipping grows, both companies see an opportunity to address environmental concerns and demonstrate the efficiency and reliability advantages of hydrogen fuel cell power solutions. Kedar Murthy, Chief Commercial Officer at Nuvera Fuel Cells, expresses enthusiasm for strengthening Nuvera’s presence in the maritime industry and collaborating with HELINOR to contribute to the decarbonization of sea-going transportation.

In alignment with the International Maritime Organization’s strategy to achieve net-zero greenhouse gas emissions by 2050, HELINOR is dedicated to accelerating the transition to zero-carbon shipping. HELINOR aims to achieve this by offering compact, lightweight, and powerful fuel cell modules that set new standards for safety at sea. Elling Helvig, Chairman of HELINOR, notes that Nuvera’s high-efficiency fuel cell engines are the ideal solution due to their high-power density, optimal use of limited on-board space, and demonstrated high-efficiency performance, resulting in longer range and lower operating costs.

Nuvera’s E-Series Fuel Cell Engines play a crucial role in enabling vessel and maritime equipment manufacturers to meet stringent emissions mandates. These engines are designed to support regulatory compliance and maintain economic competitiveness by delivering high-performance power solutions. The collaboration between Nuvera Fuel Cells and HELINOR Energy signifies a concerted effort to advance the development and adoption of zero-emission energy solutions within the maritime industry.

Global Logistics, Global Trade Daily, War

Israel-Palestine Conflict Set to Create Challenges in Maritime Industry while Trade Continues with Caution

October 13th, 2023 Container xChange Leave a comment

The Israel-Palestine conflict, marked by recent violence between Israel and Hamas, has sent ripples through the shipping and maritime industry, leading international companies to issue cautionary advisories and adapt their operations in the region.

“In light of recent developments in the Middle East, including the outbreak of war in Israel and its vulnerability to missile attacks and the incursion of opposing militias, the security of transporting goods through the port of Haifa has become uncertain. The transit of containers, especially hazardous materials, and the arrival of commercial vessels greatly emphasize the importance of security on this route. Such insecurity or potential terrorist attacks could lead to a shift in the transportation of goods,” said Hossein Norouz Fashkhami, a senior marketing expert from Middle East.

Shipping industry’s resilience amidst Israel-Palestine conflicts

Maersk, a major player in the industry, reassured stakeholders by announcing that its port operations across Israel’s key terminals are functioning without disruption. MSC echoed this sentiment, asserting that Israel’s major terminals are operational, enabling them to facilitate cargo delivery.

However, the maritime industry is aware of the security situation, and companies such as MSC remain vigilant, pledging to monitor the situation closely and heed government guidance. This underscores the industry’s adaptability and resilience in the face of geopolitical tensions.

The specific impact on individual ports tells a compelling story:

Port of Ashdod: This port, situated a mere 50 kilometers from the Gaza border, operates in an ’emergency mode’ only, subject to potential missile attacks. Furthermore, restrictions on vessels carrying Hazardous Materials (“HAZMAT”) remain in effect.
Port of Haifa: In contrast, the port of Haifa, encompassing the Haifa Bay port and Israel shipyard, continues with business as usual, undeterred by the conflict.
Port of Ashkelon: Located just 15 kilometers from the Gaza border, the Port of Ashkelon is severely impacted, rendering it incapable of normal operations due to missile threats. Vessels can only discharge cargo while moored at sea buoys, highlighting the risk and necessity for adaptive measures.
Port of Hadera: The port of Hadera, in comparison, carries on without disruption, maintaining its regular functions.
Port of Eilat: The port of Eilat similarly remains operational, showcasing the industry’s commitment to ensuring the flow of maritime trade.

Beyond the ports, several global companies with a presence in Israel have been forced to adjust their operations. Chevron, the second-largest U.S. oil and gas producer, was directed by Israel’s energy ministry to shut down the Tamar natural gas field off the country’s northern coast. Adani Ports, operator of the Haifa Port, assured stakeholders of operational readiness while closely monitoring the situation and having a business continuity plan in place.

The Israel-Palestine conflict serves as a testament to the shipping and maritime industry’s ability to adapt, demonstrating that despite challenges and disruptions, trade and operations can persist, albeit with the necessary caution and vigilance.

Global trade relationships hang in the balance, with disruptions, diplomacy, and dollars at stake

Israel’s trade with China is characterized by a notable trade imbalance, with China being a major importer of Israeli goods. While Israel’s exports to China are substantial at $4.68 billion, the conflict may disrupt trade flows, particularly concerning Israel’s high-tech exports. The disruption could affect Israel’s exports and potentially hinder access to China’s vast market.

The United States is a critical trade partner for Israel, with a strong focus on exports. Israel exports goods worth $18.67 billion to the U.S., including high-tech products and defense-related items. The conflict may strain diplomatic relations between the two countries, potentially impacting Israeli exports to the U.S.

Germany is a key European trade partner for Israel. The conflict might impact Israel’s exports to Germany, valued at $1.88 billion. As Israel navigates regional instability, German imports from Israel could be affected.

India is another crucial trading partner for Israel, with $3.94 billion in Israeli exports. The conflict could have an impact on bilateral trade, potentially leading to disruptions in Israel’s exports to India.

Uncertainties surrounding ambitious trade initiatives

“The Israel-Palestinian conflict serves as a reminder of the uncertainties facing ambitious trade projects like the India-Middle East-Europe Economic Corridor (IMEC), positioned as a Western counterpart to China’s Belt and Road” said Christian Roeloffs, cofounder and CEO, Container xChange.

IMEC, involving railways, ports, and green energy, aligns with the G7’s plans to mobilize $600 billion by 2027 for global infrastructure investments. India’s trade with Saudi Arabia has doubled in two years, reaching $53 billion in 2023, but the corridor’s true potential lies in strengthening Indian-European trade ties.

To fully realize IMEC, a reliable link between Saudi Arabia and Israel is essential. However, the ongoing regional complexities make it riskier for Saudi Crown Prince Mohammed bin Salman to normalize diplomatic relations with Israeli Prime Minister Benjamin Netanyahu.

In the near term, the Suez Canal remains the primary route for goods from India to Europe. This conflict underscores the enduring complexities of reshaping global trade and financial routes, highlighting the unpredictable nature of such endeavors.

Geopolitical conflicts and global health crises, unfortunate as they are, often lead to unintended consequences, boosting profits in specific sectors. Wars tend to inflate returns for defense contractors, while the pandemic brought substantial gains for select pharmaceutical companies. The maritime industry is not immune to these dynamics, with shipowners reaping unexpected benefits from both types of crises.

Christian Roeloffs added – “In the case of the conflict in Israel, any expansion of the hostilities beyond the country’s borders could introduce risks to two vital shipping choke points. The Suez Canal, a critical waterway for various commercial vessels, including container ships, may face disruptions. Similarly, the Strait of Hormuz, a backbone for oil and gas shipping, could be affected. However, the extent of these effects will largely depend on the conflict’s expansion and duration.”

It’s worth noting that Israel itself represents a relatively small market for container shipping, with its primary ports of Ashdod and Haifa accounting for just 0.4% of global throughput. Consequently, the threat of disruptions to container trade flow through the Mediterranean region remains limited.

Additional Information

India-Israel exports, costs, and risk management amid conflict

Key Indian exports to Israel include diesel, cut and unpolished diamonds, electronics, and telecom components like integrated circuits and photovoltaic cells. Conversely, India’s imports from Israel consist mainly of rough diamonds, fertilizers, and herbicides. This evolving trade relationship extends beyond traditional sectors, encompassing electronic machinery, high-tech products, communication systems, and medical equipment.

Higher costs for Indian exporters: The Israel-Hamas conflict has raised concerns about increased costs for Indian exporters, such as higher insurance premiums and elevated shipping expenses. These expenses stem from the heightened risk associated with shipping goods to regions experiencing geopolitical unrest.

Limited impact on trade volumes but financial strain on exporters: While the conflict may result in higher expenses for Indian exporters, the impact on trade volumes is expected to be limited unless the war escalates significantly. The primary concern is the financial burden on exporters, which may reduce their profit margins.

Risk Premiums from ECGC to Safeguard Indian Businesses: To protect Indian businesses from potential losses due to geopolitical uncertainties, India’s Export Credit Guarantee Corporation (ECGC) may introduce higher risk premiums for firms exporting to Israel. This is a standard risk management practice in regions facing increased instability.

While the Israel-Hamas conflict has the potential to increase shipping costs and insurance premiums for Indian exporters, it is essential to emphasize that the impact on trade volumes remains relatively limited at this stage. The bilateral trade relationship between India and Israel has diversified in recent years, encompassing various sectors beyond diamonds and petroleum products.

Archives, Global Trade Daily, Technology

Nuvera Expands Maritime Industry Engagement

January 23rd, 2023 Tim Jay Leave a comment

Nuvera Fuel Cells, LLC announces the sale of two Nuvera® E-60 Fuel Cell Engines to Nexus Energy, a sustainable innovation company based in the Netherlands that is developing modular zero emission solutions for maritime and on-shore applications. Nexus Energy will use the 60 kW hydrogen fuel cell engines in the development of a common modular powerpack for maritime and on-shore use, for both stationary and heavy-duty applications.

Nuvera fuel cell engines help maritime vessel and equipment manufacturers to comply with tightening emissions regulations and mandates and remain economically competitive by providing high-performance zero-emission power solutions fueled by clean hydrogen. The International Maritime Organization is targeting a 50% cut in greenhouse gas emissions by 2050. Many governments and maritime industry players believe 100% is the appropriate goal.

ABOUT NUVERA FUEL CELLS, LLC

Nuvera Fuel Cells, LLC is a manufacturer of heavy-duty, zero-emission engines for mobility applications. With teams located in the U.S., Europe, and Asia, Nuvera provides clean, safe, and efficient products designed to meet the rigorous needs of industrial vehicles and other transportation markets.

Nuvera is a subsidiary of Hyster-Yale Group, Inc., which designs, engineers, manufactures, sells, and services a comprehensive line of lift trucks and aftermarket parts marketed globally primarily under the Hyster® and Yale® brand names. Hyster-Yale Group is a wholly owned subsidiary of Hyster-Yale Materials Handling, Inc. (NYSE:HY). Hyster-Yale Materials Handling, Inc. and its subsidiaries, headquartered in Cleveland, Ohio, employ approximately 8,100 people worldwide.

Shipping Industry Faces Tough Choices Under New FuelEU Maritime Regulations

What is happening in the Red Sea?

What sector is being affected the most?

The additional costs behind the Red Sea disruptions

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