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

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Global Logistics, Global Trade Daily, War

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

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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.

battery Entrepreneurs are shaking up industry that carries ocean shipments of export cargo and import cargo in international trade.
Global Logistics, Global Trade Daily

Balancing Ambitious IMO Targets with Available Solutions 

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Examining responsibility shift, cost-effective alternatives, and innovative battery tech in shipping 

The International Maritime Organization (IMO) has significantly changed its emissions reduction targets, shifting towards a more ambitious goal of achieving net-zero emissions as close to 2050 as possible. By 2030, member nations have committed to sourcing 5% to 10% of the energy used to power ships from zero to near-zero emission fuels and technologies. These changes vary based on each country’s development classification and economic impact of the maritime sector. 

While these revised targets demonstrate a stronger commitment to emissions reduction, they also raise concerns about the availability and feasibility of alternative fuels. And as the responsibility for decarbonization shifts to member participants and shipowners, there is a growing realization that there are few cost-effective tools and practical solutions for reducing emissions in the shipping industry. To gain momentum in reducing shipping-sector emissions, a collaborative, multi-faceted approach is needed to prioritize research and development of low-cost and accessible technologies. 

Reassigning the Burden 

The shift of responsibility from the IMO to individual nations and shipowners has raised concerns regarding the effectiveness of global rules in achieving emissions reduction targets. While differentiated responsibilities based on development and the economic importance of shipping may provide flexibility, critics argue that this moves away from a stringent global rule and poses challenges to keeping global warming below the critical threshold of 1.5 degrees Celsius. It calls into question the level of commitment and consistency among associated participants in implementing robust measures to decarbonize their shipping sectors. 

Improving hydrodynamics, enacting energy efficiency measures, and lowering cruising speeds can reduce fuel consumption, but cost-effective alternative fuels are essential to making real progress. The options currently under consideration, such as ammonia, methanol, and hydrogen, still face challenges regarding availability, safe implementation, and carbon-neutral production. These alternatives also require significant production capacity before they can be widely adopted as viable solutions for carbon reduction. Liquid natural gas has been proposed as an interim solution, but that still leaves the industry reliant on fossil fuels and requires shipowners to install emission scrubbing systems. 

Inexpensive Tools for Decarbonization 

One potential avenue for partial emissions reduction is battery storage, which offers a range of benefits. Battery systems can be used for peak shaving at sea, kicking in when more power is needed than can be provided by one engine, but less than generated by two. Battery power can be used for low-speed arrival and departure, reducing the need for ships to switch fuels when approaching port. And batteries can also be used for hotel loads, eliminating the need for diesel generators. 

But what batteries are suitable? Lithium-ion batteries, despite their widespread use, have certain drawbacks related to cost, flammability, and toxicity. Recent high-profile battery fires on ro-ros and cargo ships are making shipowners and insurers reassess the risks posed by these batteries, highlighting the need for alternative technologies that offer improved safety, environmental sustainability, and performance. Safer options such as flow batteries are too bulky for use on ships, taking away from available cargo space. Fortunately, startups and researchers are working on options that combine safety with high energy densities, and with investment, commercializing these alternatives will allow the shipping industry to accelerate its transition toward net-zero emissions while mitigating the concerns associated with lithium-ion. 

Striking the Balance 

There’s an axiom that goes “don’t let the perfect be the enemy of the good,” meaning it’s better to do something useful now rather than wait for a perfect solution that may never arrive. With that in mind, the shipping industry should look to strike a balance between its 2050 aspirations and the availability of realistic solutions. While the urgency to combat climate change necessitates bold goals, waiting until a perfect solution is available could put decarbonization efforts further behind schedule. Implementing smaller, incremental changes as they become available will help reduce emissions sooner than later. 

 The shipping industry must allocate resources to support the simultaneous exploration of alternative fuels, advanced propulsion systems, and battery energy storage solutions to bridge the gap between 2023 and 2050. By investing in research and development, the industry can unlock new possibilities and pave the way for innovative technologies that can revolutionize the sector’s decarbonization efforts. These investments will contribute to meeting ambitious targets and foster economic growth and competitiveness in the evolving clean energy landscape. 

Mukesh Chatter is the CEO of Alsym Energy, a technology company developing a low-cost, high-performance rechargeable battery chemistry that is free of lithium and cobalt. 

 

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Archives, Global Logistics, Global Trade Daily, Ocean Carriers, Ocean Ports

The Future of Ship Systems to be Smarter with Ship Bridge Simulators

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The maritime industry is not new to the simulation technique and has, in reality, been using this technique in automation as well as numerous other applications. The rising implementation of advanced technologies & automation in the maritime sector has surged the need for ship bridge simulators. The Asia-pacific region has rising passenger traffic and massive import & export businesses; as a result, the region is likely to be in major need of marine systems equipped with ship bridge simulators.

The maritime sector is transiting toward autonomy by enabling assistance in navigation and decision support systems using simulations. At some point in time, if two autonomous vessels crafted by different producers come across each other, how will these vessels communicate? How intricate will the navigation be? Will the ships discuss intricate navigational maneuvers? Will the two autonomous systems be able to communicate in a proper way? Simulation or formulating mathematical models to impersonator trustworthy real-world effects can offer numerous solutions to these questions.

The marine industry is not new to the simulation technique and has, in reality, been using this technique in automation as well as numerous other applications. For example, simulation is used for coaching squads for new vessels before these vessels delivered for crane management and towing in seaports to check loopholes in ship systems and other purposes. For years, simulators are extensively used in training and certification mainly in the Maritime Education and Training (MET). They are used in numerous areas of the marine sector including cargo handling, crane operations, system control, offshore operation training on ships, bridge operations, and towing & anchor handling. Such a wide range of applications of simulators has propelled their demand in recent years. A report by Research Dive reveals that the global ship bridge simulator market growth is expected to skyrocket and the market is anticipated to garner significant revenue in the upcoming years.

Alexander Ozersky, the Deputy Director-Intellectual Systems at Wärtsilä Voyage Solutions, believes that simulation is a technique that permits to do mistakes without triggering any severe outcomes in the real world. A vessel can need nearly ten years to develop or redesign its system. However, by making use of simulation techniques one is able to do it more quickly, more safely, and at a reasonable price. This is why a simulation-based method was used to attest to the functionality of COLREGS (Convention on the International Regulations for Preventing Collisions at Sea) in Wärtsilä Navi-Harbour vessel traffic management system with ClassNK, a global leader in ship classification.

Panorama of the Ship Bridge Simulator Market:

There is a tremendous need for skilled ship operators or watch captains on a vessel for directing navigation, map plotting, weather monitoring, fire management, observation, search, and operation rehearsals. Also, there has been significant development in war systems and technologies; for example, electronic as well as network-centric wars use ship bridge simulators for testing systems. In addition, the rising implementation of advanced technologies & automation in the marine sector has surged the need for ship bridge simulators. Moreover, strict rules issued by maritime lawmakers for proficient coaching of electronic war workforces have propelled the demand for ship bridge simulators in recent years. All these factors portray that the global ship bridge simulator market is accelerating at a rapid pace and is expected to reach significant heights in the coming years.

In the past few years, ship makers have observed that the virtual reality simulation is considerably more proficient than conventional marine simulator training. In virtual simulation devices, a helmet is used that shows a video and is assimilated with sound effects and simulation sensor systems. With these sensors, the virtual simulation helmet can detect activities of the user’s extremities. The incorporation of such advanced technologies is opening doors to lavishing opportunities for market growth.

The Asia-pacific region has rising passenger traffic and massive import & export businesses. As a result, the region is likely to be in major need of marine systems and hence, be a major revenue contributor for the market growth. On the other hand, the North American region is projected to stand at a second position in terms of growth in the ship bridge simulator market. This is majorly owing to the stringent regulations issued by the governments in the region for upholding standard security. The LAMEA region is foreseen to witness continuous growth due to the evolving marine trades in these regions.

The Lookout of the Market during the COVID-19 Pandemic

The COVID-19 pandemic has struck the maritime industry with various unprecedented challenges that hampered its supply chain and compelled quicker implementation of digital technologies in numerous areas of maritime operations, including the area of MET. As the virus was capable to multiply at a rapid pace with person-to-person interaction, several processes that need the physical presence of working personnel have been either postponed or limited for averting human mobility, as a protection measures against the COVID-19 virus. The termination of physical training programs, lockdown, and travel restrictions have triggered several difficulties for seafarers to obtain or uphold their certificates of proficiency. As the MET industry is also experiencing various challenges in ensuring the endurance of the MET activities, and in coping and adapting to the restrictions imposed during the COVID-19 pandemic, the ship bridge simulator market growth is expected to decline to a certain extent until the pandemic relaxes.

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Aishwarya Korgaonkar holds a bachelor’s degree in Information Technology from the esteemed Mumbai University. Being creative and artistic, she leaped into the field of digital marketing and content writing. Her love for words makes her write creative and spellbinding content that adds colors to the world.

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Archives, Global Logistics, Global Trade Daily, International Trade

The Suez Canal Crisis: Some Lasting Ripples Aren’t Making Headlines

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It came down to physics: a sandstorm, shipping containers stacked too high (believe it or not, they acted like a sail), and a ship too big to spin around.

At the time of this article’s publication, it’s still unclear whether human error by the Ever Given’s captain is also partially responsible for the global shipping crisis caused by the 20,000 TEU container ship’s weeklong “vacation” in the Suez Canal.

Also at the time of publication, the crisis — which ended more than two weeks ago — continues to result in global shipping delays averaging five to six weeks.

I see two main areas where the ripples of the disaster will continue the strongest:

Increased pricing, decreased supply: The carriers are taking advantage of the situation and North American shippers are suffering as their equipment is being sent out empty to regions where the carrier can take a financial position and move those containers at greater profits.

In 2019, shipping industry profits came in at about a dismal -$12 billion. In 2020, they managed to flip it to +$14 billion — that’s not a trend they’re going to let go of easily.

Compounding obstacles: Shippers were stretched even before the Ever Given headed down the canal that fateful day, so adding capacity isn’t a viable solution. The previous problems hampering shippers are now exacerbated.

-The global shortage of shipping containers continues to cause a ripple effect of its own.

-Travel restrictions stemming from the pandemic continue to result in reduced air cargo opportunities.

-The above factors and more continue to overwhelm trucking companies, who face employee shortages and rising expenses.

North American recovery is also hampered by a lack of awareness on the global stage. Many companies headquartered abroad don’t understand the hurdles American vendors continue to face — for example, the price gouging. The United States is one of the only countries where the  government doesn’t oversee or own lines of transportation — in most others, it controls or owns at least cargo shipping and airlines — so vendors and logistics companies are dealing with rate hikes. On the other hand, those countries are also at risk of delays caused due to slow-acting governments entrenched in bureaucracy.

CTOs should be concentrating on finding other viable ways for customers to move freight. Plan for a delay of 5-7 weeks compared to your usual shipping estimates, for the foreseeable future. Air freight — despite the delays caused by the pandemic-crippled air travel industry — is probably your best bet for now. You might have to get your CPO and/or client to make some tough decisions based on how eager they are to get their product to market.

Your next priorities are forecasting and having your product line in order. Take note from restaurants and doctor’s offices and build healthy amounts of downtime and lead time into your shipments. At this point in the recovery stage, a strong enough hiccup can still cause a significant backtrack to the progress.

Even though everything is “fixed,” we’re not going back to normal in the near future. In our industry, the pendulum normally has a five-year swing for the upper hand between shippers and vendors. When it comes back down in our favor, it won’t be anywhere near the levels we enjoyed the last time it was our turn.

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As Chief Transportation Officer, Carmen Gerace oversees all aspects of global transportation for BDP International, including the implementation of new transport solutions and product offerings while also developing future transport strategy. Throughout his 25+ career in the industry, he has held varying managerial and executive positions at BDP. Carmen is based in Philadelphia, PA, and can be reached at carmen.gerace@bdpint.com. 

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Archives, Global Trade Daily, Ocean Ports

UK Ports Suffering Post-Brexit Container Logjams

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Post-Brexit trade disruption and ongoing congestion are causing critical build-ups of containers at UK ports, according to the latest data from Container xChange.

The UK’s leading container terminals struggled to cope with the pandemic-driven surge of imports last year resulting in lengthy delays for haulers and vessels and an excess of containers building up in ports. 

Since the UK departed the European Union on January 1 and started trading under a post-Brexit customs and regulatory regime, the latest data from Container xChange, the world’s leading online platform for buying, selling, and leasing shipping containers, indicates the situation has worsened.

Under Container xChange’s Container Availability Index (CAx), an index reading of 0.5 describes a balanced market. Below 0.5 means there is a shortage of containers. Above 0.5 means there is an excess of containers.

At the port of Felixstowe, the average reading of the CAx so far in 2021 for a 40 ft container is 0.95, up from 0.79 in 2020. The CAx for a 20 ft box has increased from an average of 0.78 in 2020 to 0.90 this year.

A similar picture is apparent at the port of Southampton where the CAx reading for a 40 ft container is 0.86 in 2021, up from an average of 0.71 last year. For a 20 ft container, the CAx reading is 0.85, up from an average of 0.72 in 2020.

“The UK’s leading gateway terminals for container traffic suffered congestion for much of 2020 prompting carriers to cut some calls and ship cargo in from European hubs via the Channel Tunnel, ferry services, and feeder services instead,” said Dr. Johannes Schlingmeier, CEO of Container xChange.  

“Based on the build-up of containers at ports in 2021, it seems the situation has further deteriorated. We are now seeing critical levels of boxes building up at Southampton and Felixstowe. Post-Brexit cross-Channel shipments are more complicated under dual Customs regimes and this could be a factor in logistics bottlenecks.”

Efforts by container lines to avoid Brexit disruption and delays at southern terminals by launching new services into the port of Liverpool are also now coming unstuck, with the port struggling to handle increased volumes. This is reflected in an accelerating excess of containers at the port.

In 2020 the average CAx reading at the port of Liverpool for a 40 ft container was 0.59. In 2021 this has climbed to 0.75. For a 20 ft container, the CAx reading in 2021 is 0.82, up from an average of 0.68 last year.

European gateway ports have also suffered disruptions and delays due to pandemic-driven container traffic surges. However, container availability at leading hubs is currently better balanced than in the UK.

At the port of Rotterdam, the CAx average reading for a 40 ft container this year is 0.51, compared to an average of 0.40 in 2020. At Antwerp, shortages have been a problem, with an average reading for a 40 ft container of 0.21 in 2020 improving to a more balanced 0.41 this year. 

Similarly, in Hamburg, the average CAx reading for a 40 ft container in 2020 was 0.27 suggesting critical shortages. This year the average reading has improved to 0.49.

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About Container xChange: Container xChange operates the leading online platform for the leasing and trading of shipping containers. More than 600 shipping companies including Kuehne+Nagel, Seaco and Sarjak rely on its platform to increase flexibility and simplify the operational handling of SOC Containers. http://container-xchange.com/

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Archives, Global Logistics, Global Trade Daily, Ocean Carriers, Ocean Ports

An Ocean of Potential in the Blue Economy

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The Blue Economy

The ocean has always been an essential part of life on this blue planet. Oceans cover over 70 percent of the Earth’s surface and contain 97 percent of the world’s water. We rely on its resources to sustain and improve our lives.

The World Bank created a definition for this “blue economy” that encompasses “sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health.”

Economic activities associated with the ocean include traditional sectors such as commercial fishing, coastal tourism and maritime transport to support global commerce. Increasingly, the ocean has been tapped for energy sources and generation of off-shore renewable energies like wind and tidal energy. Marine life is explored for applications to pharmaceuticals, desalination offers an opportunity to meet demand for freshwater, and the ocean can be used for carbon sequestration to mitigate climate impacts.

World Bank Definition of Blue Economy

Vital to Livelihoods and Growth

In one form or another, trade in ocean resources contributes between $3-6 trillion to global GDP, supporting the livelihoods of over 3 billion people on the planet.

Recognizing the importance of measuring the economic impact of the ocean, the Bureau of Economic Analysis (BEA) partnered with the National Oceanic and Atmospheric Association (NOAA) in 2019 to develop prototype statistics to measure the ocean’s contribution to the U.S. economy. From aquaculture to shipbuilding, offshore mining and power generation, marine-related activities contributed some $373 billion to U.S. GDP in 2018.

Tourism and recreation generated the most, bringing in just shy of $143 billion in wages, profits, and tax revenue for coastal communities in the U.S. in 2018. The new data also showed that between 2014 and 2018, the American blue economy grew faster than the overall U.S. economy.

SOURCE: U.S. Bureau of Economic Analysis

U.S. Ocean Economy

value added by activity in 2018 (millions of dollars)

Tourism and recreation – 38%

National defense and public administration – 33%

Living marine resources – 3%

Marine transportation – 1%

Offshore minerals and utilities – 15%

Deeper Dive into the Ocean Economy

Fisheries and Aquaculture

The ocean delivers a vital and primary source of protein in the diets of over 3 billion people. Marine fisheries employ over 200 million people either directly or indirectly. Expanded global availability of refrigerated storage and transportation has extended access to all kinds of fresh fish.

Overfishing, exacerbated by heavy government subsidies, has become a key concern, putting nearly 90 percent of the world’s fish stocks are at risk. Both the UN and the WTO have made removing these subsidies a priority to help protect vulnerable coastal communities who rely on fish for their own consumption and the local economy.

One-half of all fish we eat is farmed rather than captured. Aquaculture is the fastest growing food sector in the world. China produces a huge amount of the world’s farmed fish and is the top producer by value of carp, tilapia, catfish, shrimp, oysters and many other types. Norway leads in salmon, trout and smelt with Chile a close second.

Tourism

Tourism has long been vital to many coastal economies. Overall, tourism employs 1 out of every 11 people around the world. It is fast becoming one of the world’s biggest industries, making up 10 percent of global GDP. International tourism is an invisible export. Visitors spend money on transportation, housing and entertainment using income earned in their home country.

From scuba diving and surfing to cruises and all-inclusive beach resorts, coastal tourism comes in many flavors. It is particularly important for less-developed nations, as it creates jobs, promotes economic growth, and brings in money that is spent in local businesses like restaurants, shops, and tour services.

Tourism is the economic lifeblood of many Least Developed Countries and small island developing states such as those in the Caribbean and southeast Asia that collectively host 41 million visitors visit every year. These states are focused on delivering services to bring in more tourists while preserving the natural beauty and resources that attract visitors to their islands.

Shipping

Over 80 percent of goods traded internationally such as raw materials, food, consumer goods, and energy products were transported by sea in 2015. Despite reaching a record high of 11 billion tonnes shipped that year, world maritime trade growth decelerated to 2.7 percent in 2018, below the historical average of 3.0, reflecting a range of risks that intensified at the time including global trade tensions, protectionism, and the ‘Brexit’ decision.

Issues surrounding maritime transport are often intertwined with other global economic, environmental and political trends. Security conflicts occur over country ownership of key shipping routes and global discussions are active over the environmental impacts of fuel-guzzling container ships.

The world’s ports can often act as a weather vane for the economy as a whole. Dockworkers feel the effects of tariffs, disasters, and other trade policy changes before farmers, truckers, distributors and retailers do. Effects of the recent U.S.-China trade war and of the COVID-19 pandemic were experienced by dockers who saw the vast reductions in imports before the economic effects rippled throughout the economy.

As supply chains continue to shift and we watch for reshoring, the maritime transport sector may start to look different over the next few years, but will undoubtedly remain an essential part of the global economy.

Stats how we rely on the ocean

Preserving Our Oceans

Sustainability is a key aspect of the blue economy. Although there is an emphasis on environmental stewardship and protection in all parts of the, nowhere is this more apparent than when it comes to our oceans, a finite and critical resource.

Overfishing or pollution could deplete fish stocks and cause a severe food crisis. Environmental degradation caused by the tourism industry could ruin the economies of coastal communities. Waste and pollution from shipping could cause accumulated damage to our air and water.

According to Conservation International eight million metric tonnes of plastic is dumped into the ocean every year. At this rate, by 2050, plastic would outweigh fish in the ocean. Other concerns cited include the runoff of harmful nutrients from agriculture into the ocean, warming temperatures that are bleaching and destroying coral reefs, and even noise pollution from shipping that is killing creatures such as jellyfish.

International governmental cooperation and advances in technology can combat these problems. Conservation and sustainable use form one of the five pillars used by the United Nations Conference on Trade and Development (UNCTAD) as part of their Ocean’s Economy and Trade Strategy project. This effort aims to mitigate damage while maintaining the important economic benefits of the blue economy that supports billions of people.

It seems no aspect of economic life has been spared disruption from the COVID-19 pandemic, including many parts of the blue economy and related livelihoods. UNCTAD released a report to chart the waters of re-opening the blue economy to become more resilient post-pandemic. It proposes enhanced coordination and communication between fisheries and distributors to cut down on food waste, exercising restraint in sanitary protectionism, and closely monitoring shipping to prevent bottlenecks and delays. UNCTAD also suggests removing fishing subsidies to tackle wasteful overfishing; developing a “2.0 approach” to coastal tourism that showcases local sustainability efforts; and digitizing maritime trade procedures to achieve efficiencies and reduce CO2 emissions.

Untapped Potential

There is still a lot we don’t know about the world’s oceans, so embracing science and discovery will play an important role as we continue to draw on its precious resources and develop new markets. Untapped economic potential includes the capture of carbon, supporting the existence of a rich oceanic biodiversity, waste disposal, and the protection of coasts.

The blue economy is as diverse as its land-based counterpart – perhaps even more so. Sustainability will continue to be extremely important both for its own sake and for the preservation of the resources we rely on every day. With careful stewardship, the blue economy can continue to support billions of people and enrich all of our lives.

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Alice Calder received her MA in Applied Economics at GMU. Originally from the UK, where she received her BA in Philosophy and Political Economy from the University of Exeter, living and working internationally sparked her interest in trade issues as well as the intersection of economics and culture.

This article originally appeared on TradeVistas.org. Republished with permission.

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Archives, Executive Education, Global Trade Daily

Breakbulk Europe to Return to Bremen in 2021

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Breakbulk Europe, the world’s largest event for the project cargo and breakbulk industry, will return to Bremen, Germany, for the fourth consecutive year in 2021 at Messe Bremen from 18-20 May.

“It’s a great pleasure to be returning to Bremen in 2021, a city that has gone above and beyond to welcome breakbulk and project cargo professionals from more than 3800 companies,” Nick Davison, Portfolio Director for Breakbulk and CWEIME events, Hyve Group (formerly ITE Group) said. “The city of Bremen has proved to be a good fit for the Breakbulk attendees with its unique blend of historical charm, modern amenities, maritime environment and visitor affordability.”

Breakbulk Europe has grown significantly since the move to Bremen in 2018, and with over 120 countries represented, its reach embraces the world. Exhibitors at the 2019 event overwhelmingly demonstrated their satisfaction with Breakbulk Europe, Messe Bremen and the city itself, by rebooking 89 percent of exhibition space for 2020 by the end of the show. Along with many repeat exhibitors, the 2020 edition will feature 70 new companies, such as Sarens, CEVA Logistics, DP World, and Airbus, who has chosen Breakbulk Europe to promote their Beluga XL aircraft.

“We are committed to bringing a world-class event to this industry that is critical to the world’s economy,” Davison said. “As we move further into this decade, we will consider alternate locations for 2022 and beyond to deliver new markets and fresh thinking, but for now, Bremen is the right choice and we would not hesitate to return in the future.”

The 2021 announcement comes three months before the opening of Breakbulk Europe 2020, and already the indicators point to another success. Online registration is tracking 13 percent ahead compared to this time last year. A strong lineup of partnerships has been secured, including companies for each of the three content areas: Masters Arena by Aurelis Real Estate Service, Main Stage by Port of Gdańsk and Tech & Innovation Hub by Erhardt. New to the 2020 experience will be a pair of professional workshops focused on risk management and chartering essentials, Education Day for local students and those new or looking to enter the industry, and the first Europe-based Women in Breakbulk breakfast, part of Breakbulk’s global networking platform for female professionals.

About Breakbulk Europe

Breakbulk Europe has become the global hub for the industrial project supply chain, including the world’s foremost manufacturers, oil & gas companies, EPCs, carriers, ports, logistics firms, specialized transporters and related service providers. This year’s event is expected to bring together around 10,000 professionals from more than 120 countries. To request exhibiting and sponsorship information and to register for the event, visit europe.breakbulk.com.

Breakbulk Europe is one of four Breakbulk global events, along with Breakbulk Middle East in Dubai, 25-26 Feb. 2020, Breakbulk Asia in Shanghai, 18-19 March 2020 and Breakbulk Americas in Houston, 29 Sept.-1 Oct. 2020.

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Hyve Group plc is a next generation FTSE 250 global events business whose purpose is to create unmissable events, where customers from all corners of the globe share extraordinary moments and shape industry innovation.  Hyve Group plc was announced as the new brand name of ITE Group plc in September 2019, following its significant transformation under the Transformation and Growth (TAG) programme. Our vision is to create the world’s leading portfolio of content-driven, must-attend events delivering an outstanding experience and ROI for our customers.

Press contact: Leslie Meredith -Marketing  & Media Director, Breakbulk Events & Media

E: Leslie.Meredith@breakbulk.com

T: +1 801 201 5971

suffolk
Archives, Global Trade Daily, Ocean Ports

PORT OF VIRGINIA PUT SUFFOLK ON THE COFFEE MAP

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Coffee’s contribution is not peanuts

Established in 1742, the little town of Suffolk, Virginia served as a port along the Nansemond River in Virginia’s Tidewater region, eventually becoming a hub for railroad transportation. An Italian immigrant put Suffolk on the food production map, establishing the Planters Nut and Chocolate Company in 1912. A Peanut Queen is still crowned at the annual peanut festival.

These days, Suffolk has a newer claim to fame in the food industry. Home to several large coffee roasters including Massimo, Zanetti USA, Keurig Green Mountain, J.M. Smucker — and soon — Peets Coffee, Suffolk has become the most caffeinated city east of the Mississippi. The coffee industry has built out a cluster of related activities that generate significant employment and revenue for the people of Suffolk.

A deep commitment to Virginia coffee

Until the 1960s New York City was the undisputed home to the coffee industry. Since then, coffee has been imported through a variety of ports on the East Coast and elsewhere throughout the country, including the ports of New Orleans, Houston, Los Angeles and, of course, Seattle which is the home of Starbucks.

How did Suffolk become a coffee epicenter for the East Coast? Location and maritime advantage. Suffolk is 30 miles west of the Port of Virginia, which was the first to accept the much larger neo-Panamax ships transiting the expanded Panama Canal beginning in 2016. Port of Virginia has embarked on a $700 million expansion project of its own. By 2025, it will have a 55-foot channel depth, making it the deepest port on the East Coast, and will be able to handle an additional one million cargo containers at two of its terminals.

Centrally located on the eastern seaboard, Port of Virginia is capable of serving the major population centers east of the Mississippi. The ports of Baltimore, Savannah, Charleston and Virginia together now account for about one-third of all the green (unroasted) coffee imported into the United States. Suffolk is conveniently located to all of them.

Roasting the competition

Suffolk’s rise to roasting prominence started with one company – Hills Bros, now Massimo Zanetti. Once Hill Bros moved to Suffolk from New Jersey, others began to see its merits as an East Coast base. Building on the foundation of early investment by Lipton, which built its first plant there in 1955, the region is now the third-largest coffee and tea cluster in the country.

The City of Suffolk, together with the Virginia Economic Development Program, welcomed the industry with large industrial sites close to Port of Virginia and collaborated to have three coffee warehouse companies licensed by the International Coffee Exchange (ICE). Only beans stored under very particular, climate-controlled conditions can be certified for trading on ICE’s commodities exchange.

Bean roasting connoisseur allowing customer to smell the aroma from the coffee beans

To ensure the people of Suffolk could move into value-added jobs in the coffee industry, local educational institutions, such as Paul D. Cook Community College in Suffolk, developed training programs tailored to the industry’s needs offering new credentials such as an Industrial Technology and Electronic Controls certification.

The companies offer interesting career paths. “Cuppers” are specialized technicians who test beans for quality and taste the beans after roasting, grading their suitability and characteristics for blending. Nora Johnson came to Suffolk to work as an intern with Massimo Zanetti in 2016 as a Florida Gulf Coast University student. Upon graduating, she joined Massimo Zanetti full-time as a Commodities Analyst, analyzing customer positions on the coffee futures market and has become involved in the company’s sustainability and responsible sourcing initiatives.

Toast the roast

The coffee industry contributes approximately 10 percent of Suffolk’s gross regional product directly, and another 13 percent through indirect and induced effects. The Port of Virginia started a new annual celebration, “Coffee Day,” so everyone can toast the roast and celebrate the opportunities trade brings to the region.

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Evelyn Suarez

Evelyn Suarez is a legal expert and consultant specializing in customs compliance and anti-corruption. Ms. Suarez serves on the Virginia Maritime Association Board, and advisory boards to the George Washington University Center for International Business Education & Research and Georgetown University Law Center International Trade Update.

This article originally appeared on TradeVistas.org. Republished with permission.
Ports America IANA
Archives, Global Trade Daily, News

Ports America Announces New Leadership for 2020

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Modern Terminals Hong Kong managing director and CEO Peter Levesque was confirmed this week as the newly appointed president for the largest North American marine terminal and stevedore, Ports America. Mr. Levesque will step into the role starting in February 2020 bringing decades of experience and a proven track record of success.

“I am thrilled to have Peter be part of our leadership team of the Ports America platform. Ports America remains focused on providing best-in-class service to many of the world’s leading shipping lines as well as the work we have completed in improving workflow solutions to beneficial cargo owners to drive dramatic growth for the company,” said Ports America CEO Mark Montgomery.

Mr. Levesque brings more than 30 years of experience in maritime business, with nine years of leadership with Modern Terminals and spearheading the Public Private Partnership (PPP) for the company.

“Having Peter Levesque join Mark Montgomery, Rick Surett and Jim Pelliccio as a core part of the management team is central to the strategic growth plan for Ports America,” said Dave Starling,  company board chairman.

“Peter’s strong leadership, experience and success in building superior organizations gives the board the utmost confidence that this team will drive the continued success of the company.”

Mozambique
Archives, Global Trade Daily, News

Mozambique Should Put Privinvest Boats into Operation

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The next several months will be critical for Mozambique. A peace agreement signed in August between Frelimo and Renamo, its ruling and opposition parties, has set the stage for national elections on October 15. “Free and fair elections,” with results accepted by all, would bolster national reconciliation in this fragile country and would be a major step away from years of low-level conflict and acrimony. Successful elections would also build momentum for Mozambique to reach its economic potential.

One of the world’s poorest countries, Mozambique suffered from years of civil war beginning soon after its 1975 independence from Portugal. One million Mozambicans died. Earlier this year, Mozambique was hammered by two devastating cyclones. While there is hope for economic progress — the country enjoys abundant natural resources — Mozambicans will need Frelimo and Renamo to overcome their bloody past and work together, whichever party wins the election.

One area of potential cooperation is securing the country’s rich but vulnerable coastline.

Earlier this decade, the Frelimo government committed to invest some $2 billion into boats and related maritime equipment to police Mozambique’s rich fisheries, which are being illegally exploited by China and others. Another aim was to develop Mozambique’s own fishing and maritime industries, including through ship repair and building. Since then, global energy giants have committed tens of billions of dollars to developing the country’s large offshore natural gas fields. This development makes securing its coastal region all the more important for Mozambique.

Unfortunately, this effort fell apart. The international shipbuilder Privinvest, supplier to some 40 navies, delivered over 60 boats, equipment and support systems. Yet these assets remain mostly unused. Almost two dozen former Mozambican government officials, including the then-president’s son, have been charged with corruption that sunk this project. Sadly, this isn’t unusual. Transparency International labels Mozambique’s corruption as “endemic,” having cost the country nearly $5 billion between 2002 and 2014.

Without these boats in use — many are literally rusting in dock — Mozambique is doing little to protect its coast against continued illegal fishing and other harmful activities. No local fishing industry is being built. The is a major lost opportunity. Despite having “great growth potential,” it should be no surprise that fisheries in Mozambique are an “under-performing sector,” according to the World Bank. The bank also has identified “strengthening governance and management” as a key goal in developing Mozambique’s coastal economy.

The new Mozambique government that takes power after the elections should make putting these boats into the water a priority. They are simply too valuable a resource to be wasted.  Overcoming this scandal and making strides to protect and develop the country’s ocean wealth for the benefit of all Mozambicans would send a powerful signal that the country is on the right track. It would also be a tangible example that Mozambique is overcoming its devastating legacy of corruption, which would help attract badly needed foreign investment.

Effectively deploying these maritime assets would require Frelimo and Renamo to shift from the campaign and to work for the common good. The new government should figure out what went wrong but, more importantly, look ahead at what needs to go right to fix the problem. Private operators would probably be best to replace the defunct state-run companies set up to operate the boats; business consultants could help figure out the best way forward. International donors and others would likely want to help recover these fixed costs.

Too often, democracies, both young and more established, suffer from a “winner-take-all” mindset that stifles cooperation and progress. Mozambican politicians, with years of violent conflict, are particularly tested. Unless Frelimo and Renamo cooperate to solve problems, setting aside their hostility, democracy will sputter, and the country will backslide. In that case, coastal problems would only worsen.

Pope Francis just visited Mozambique. He urged “hope, peace, and reconciliation,” praising the peace deal and personal courage shown by Frelimo President Filipe Nyusi and Renamo leader Ossufo Momade. Both men face hard-liner opposition within their parties. Hopefully, this spirit of cooperation and reconciliation will grow in Mozambique.

The new Mozambique government will face many challenges. Expectations by Mozambicans run high, especially with the development of natural gas. Putting idle boats and other maritime assets to work to protect and responsibly develop the country’s natural wealth would be an excellent way to help meet these challenges.

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Tom Sheehy is a former staff director of the Foreign Affairs Committee in the U.S. House of Representatives.