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Mixed Signals from China’s Shipping Container Trading and Leasing Markets

global trade container

Mixed Signals from China’s Shipping Container Trading and Leasing Markets

Container xChange released its latest monthly China market update, revealing that the average container prices in China have held steady in July for the first time in 2024. 

Read also: The Evolution Of Container Chassis Provisioning

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Chart 1: Average prices for 40 ft high cube cargo worthy containers, July 2023 to July 2024

While the average container prices (for container trading) in China stabilize this month, the average leasing rates from China to the US and China to Europe continue to surge in July. 

global trade container
Table 1: Month on month comparison of average leasing rates for 40 ft HC containers

“The recent volume increase and subsequent container price hikes, was primarily driven by the pulling forward of orders, raising questions about the strength of underlying demand. If this demand proves to be weak in the H2 of 2024, we could see container prices and freight rates momentum decline.” shared Christian Roeloffs, cofounder and CEO of Container xChange, the global online marketplace for container trading and leasing. 

In the short term, Container xChange reports that average leasing rates for westbound trade from China have continued to surge throughout July.

Muhammad Farhan Khan, CEO at Sourcing Riders Ltd (Import & Export Company in China), shared that, China’s container demand is surging, particularly for shipments to the US, driven by increased consumer spending. However, capacity constraints and disruptions in major shipping routes have led to significant spikes in leasing rates. Despite these challenges, container prices have not significantly increased in July 2024, indicating a more balanced market. The overall situation remains dynamic and volatile.”

According to Farhan, the updated Ocean freight rates for August’s 1st half on the China to US West Coast have reached $8,800 (August 1-15, 2024) from $8,200 (for July1-15 2024) and for China to US East Coast have also increased to $9,700 (August 1-15, 2024) from $9,100 (for July1-15 2024)

China to Europe average container leasing rates rise at a slower pace

Average container leasing rates on the China to Europe route continue to rise but at a slower pace this month. Month-to-month increases from June to July 2024 show a continuing trend of rising costs. Looking at the longer duration, the year-over-year increases highlight the impact of the Red Sea crisis, which caused container prices to inflate throughout this year. 

global trade container
Chart 2: Shanghai to Europe average leasing rates for 40ft HC, July 2023 to July 2024

 

Chart 3: Monthly Average container leasing prices across major China-to-Europe routes, July 2023 to July 2024

Higher average leasing rates from China to US West Coast compared to East Coast

Container leasing rates continue to climb on the China to US route, with significant month-to-month increases from June to July 2024, reflecting ongoing congestion and supply chain disruptions impacting this route. 

According to the data, average container leasing rates are generally higher on China to US West Coast (Long Beach, Los Angeles) routes compared to the US east coast. 

From the data, the average container leasing rates from China to the US West Coast in July 2024 are higher compared to those to the US East Coast.

Table 2: Average container leasing rates from China to US east and west coast in June and July 2024

Labor negotiations at U.S. East Coast and Gulf of Mexico ports pose a significant risk for shippers already dealing with extended transit times and increased costs. The International Longshoremen’s Association (ILA) contract, covering 45,000 dockworkers from Maine to Texas, expires on September 30.

Canadian routes also witness a substantial increase but tend to be slightly lower than the US counterparts.

Market Outlook

While the current data indicates a potential stabilization in container prices, the market remains sensitive to global economic conditions and trade dynamics. 

The macroeconomic indicators from China reveal a mixed picture. House prices have dropped more sharply than anticipated, declining by 4.5% year-on-year compared to the forecasted 4.1%. GDP growth also fell short of expectations at 4.7% versus the predicted 5.0%, and retail sales increased by only 2% year-on-year against a forecast of 3.2%. On the other hand, June exports showed a positive trend, rising by 3.6% year-on-year for the first six months of 2024.

Carriers and leasing companies are optimistic about a further upswing in trade activity. However, we believe that the current surge in demand is primarily driven by large retailers preemptively managing inventories for the peak season, rather than a robust demand recovery. Consequently, the likelihood of container prices sliding and stabilizing at a lower level is high. The recent stabilization of container prices in China aligns with our earlier forecast, suggesting that the peak of price hikes may have been reached or is nearing soon.” Shared Christian Roeloffs, cofounder and CEO of Container xChange.

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RXO and Shiplify Partner to Enhance Transparency and Efficiency for LTL Shippers

Shiplify, a leading accessorial revenue identifier for carriers, shippers, and third-party logistics (3PL) providers, has announced a strategic partnership with RXO, a top provider of asset-light transportation solutions. This partnership integrates Shiplify’s data with RXO’s proprietary RXO Connect™ platform, offering less-than-truckload (LTL) customers enhanced visibility into accessorial charges before delivery, thereby improving billing transparency.

Read also: Benefits of LTL Freight Shipping

Leveraging Shiplify’s AI-driven data capture, which has processed millions of shipments from leading LTL carriers, RXO customers can now access accurate location data for efficient planning and execution of address-specified deliveries. Shiplify seamlessly integrates with RXO Connect, RXO’s proprietary platform that allows shippers and carriers to book, track, and manage shipments.

“Shiplify not only aids in revenue retention by identifying key accessorial captures but also provides RXO customers with clearer, more actionable data,” said North Winship, President of Shiplify. “This level of transparency ensures a better overall experience, fostering trust and satisfaction between RXO and their customers while enhancing operational efficiency.”

Shiplify’s location knowledge base provides precise attributes for various freight delivery scenarios. For limited-access locations, the platform helps avoid unexpected challenges and fees by determining the necessary additional equipment and services for successful deliveries. Residential locations benefit from accurate address recognition, ensuring seamless home deliveries. RXO can ensure drivers arrive with the required equipment to complete deliveries efficiently. Dock access identification optimizes shipping processes by identifying locations with or without docks, streamlining deliveries, and reducing handling time.

Additionally, Shiplify enhances delivery insights by determining forklift accessibility at delivery locations, ensuring smooth unloading and efficient operations. For complex delivery scenarios, it identifies multi-tenant locations, facilitating proper coordination with multiple occupants.

“RXO is committed to providing our customers with a superior experience when shipping LTL freight,” said Lou Amo, President of RXO’s truck brokerage business. “Our partnership with Shiplify enables RXO customers to have clean and advanced delivery data, reducing surprises during the billing process.”

RXO has been at the forefront of AI and machine learning use for over a decade, building proprietary algorithms for pricing, customer service, and real-time data analysis. By integrating Shiplify’s sophisticated AI-driven data capture, RXO further enhances the precision and responsiveness of its logistics operations.

The integration also includes a robust feedback loop mechanism. If incorrect data is provided, users can log the issue with Shiplify, and necessary changes are made within 24 hours to ensure accuracy for future shipments.

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Hurricane Beryl Shuts Down Major Texas Ports Amid Strengthening Storm

Hurricane Beryl has forced the closure of several major ports in Texas, leading to a surge in vessel traffic near the Houston coast. According to Reuters, the hurricane has already left a path of destruction in the Caribbean, claiming at least 11 lives.

Currently a Category 1 hurricane, Beryl is expected to intensify to a Category 2 by the time it makes landfall on Monday, as reported by the U.S. National Hurricane Center (NHC).

The 52-mile Houston Ship Channel, which provides access to eight public facilities and approximately 200 private terminals, imposed transit restrictions on July 7 before completely halting traffic. This led to the closures of the Ports of Corpus Christi, Houston, Galveston, Freeport, and Texas City, as Coast Guard captains set the condition ‘Zulu’ over the weekend.

With gale-force winds expected within the next 12 hours, all vessel movements and cargo operations are restricted. The NHC reported that an Air Force Reserve Hurricane Hunter aircraft found Beryl’s maximum sustained winds had increased to nearly 75 miles per hour (MPH).

Last August, a Category 4 hurricane sweeping through Mexico’s Baja California peninsula caused ports across Southern California to experience record-breaking rainfall.

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Rising Shipping Costs Strain Global Trade Amid Geopolitical Unrest

Global trade is under immense strain as rising shipping costs and geopolitical events create significant challenges. The importance of the Red Sea shipping route cannot be overstated, but for over six months, Houthi militias from Yemen have been targeting ships in the region due to their ties to Israel. These attacks coincide with Israel’s ongoing conflict with Hamas in Gaza.

Read also: Container Rates Surge Amid The Red Sea Crisis

For example, on June 20, the Houthis sank a coal ship with a drone strike, citing their support for the Palestinian cause. In response, US and British military vessels have targeted militia positions in Yemen, and international coalitions, including the EU’s naval mission Aspides, are working to secure maritime traffic.

Escalating Shipping Costs

The conflict has led to higher freight costs and increased expenses for insuring commercial trade goods. The risk of losing a vessel, especially in the Red Sea, has caused shipowners to face higher insurance premiums. Additionally, many are avoiding the Suez Canal for safety reasons, opting instead to navigate around the Cape of Good Hope, which increases travel times and fuel consumption.

The Drewry World Container Index reported a 7% increase in shipping prices for a 40-foot container within the third week of June, marking a 233% rise compared to the same time last year.

Adapting to New Routes

Simon MacAdam, an analyst at Capital Economics, noted that shipping companies are adapting by finding new routes. However, costs are rising again as importers move up orders to ensure sufficient stock throughout the year, exacerbating price spikes.

Increased Demand for Ships

Jan Hoffmann, a trade expert at UNCTAD, explained that longer travel routes require more ships to maintain supply. The average travel distance for a container in 2024 is 9% longer than in 2022, necessitating more vessels and personnel, which drives up freight prices. Additionally, increased shipping speeds are leading to higher greenhouse gas emissions.

Challenges in the Panama Canal

In Central America, low water levels in the Panama Canal are limiting its use. This has forced US shippers to integrate a “land bridge” into their sea routes, transporting goods across the US by rail or road. For bulk commodities like wheat or liquefied natural gas, this is economically unviable, leaving shippers with no choice but to take the long and dangerous route around Cape Horn.

Future Outlook

While there is some hope for the Panama Canal as water levels have slightly recovered and the La Niña weather phenomenon could ease the situation further, the Red Sea remains a dangerous route. Around 70% of trade in the region is being rerouted around Africa. Prolonged disruptions could overwhelm shipping companies and further increase freight rates, as building new ships takes years and higher capacities cannot be achieved overnight.

The ongoing geopolitical tensions and their impact on global trade highlight the fragility of international supply chains and the need for adaptive strategies to navigate these turbulent times.

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C.H. Robinson: How Shippers Can Navigate Spot Market As Ocean Rates Rise

C.H. Robinson’s Ali Ashraf, director of North American ocean services, and Greg Scott, global director of LCL, provide insights on the current ocean spot rate environment as rates continue to rise amidst disruption. Shippers should expect volatility to continue. Here’s an overview of the market and what shippers need to know to navigate it strategically:   

Shippers had good reason to expect this year would be a buyer’s market for ocean freight, after carriers added capacity last year and were expected to add more in 2024. But a mix of global events and high demand across trade lanes so far in Q2 2024 has driven ocean capacity down and rates up – in some cases to a premium. 

The challenge is especially acute for shippers who were not able to secure enough space at long-term contract rates when ocean carriers set strict contract deadlines in early May and/or limited allocations in the rush to finalize deals. Now, they’re wondering how they can move their goods on time without breaking the bank. 

Read also: Shippers Frustrated as Spot rates Rise With Demand

Shippers face elevated ocean rates – or air rates – if they have cargo in Asia that needs to move now. But for shipments that don’t need to be moved urgently, there are steps shippers can take to create some flexibility in their shipping strategy and help manage costs. 

Rough waters 

The frenzied race to the finish line that we saw during contract season seems to be sticking around for this year’s ocean peak shipping season, amid a lot of turbulence and uncertainty. 

In the second half of April into mid-May, demand for space on Asia-to-U.S. ocean vessels started to pick up at a time when some carriers were using blank sailings to limit capacity in response to the lower demand seen after the Chinese New Year. Other trade lanes, such as exports from Asia to Europe and Latin America also saw an uptick in demand, which caught the market by surprise.  

The additional capacity that entered the market last year and in the first half of this year has not been enough to cover the re-routing of Cape of Good Hope. Carriers have been looking to the charter market to cover the additional capacity needed. And we are now seeing additional capacity getting added to the U.S. West Coast via new strings and extra loaders.   

However, no additional capacity is headed to the U.S. East Coast or Gulf Coast as of today in terms of new strings and even extra loaders. Some carriers that planned to bring in new capacity to these lanes have moved those vessels to the Asia-Europe trade lane due to the Cape of Good Hope re-routings as more assets are needed there and congestion has affected that lane at a higher rate.  

As a result of the current market, spot rates kept climbing higher last month. Rates from China to North Europe more than tripled in May, for example, while rates from China to the U.S. East Coast more than doubled. Rates have only continued to climb higher this month, and carriers are now offering premium services to secure space for priority cargo. 

Certainly, a key reason rates keep increasing is because of the ongoing risk of attacks on vessels in the Red Sea, driving carriers to reroute shipments far off course. But several converging events are also playing a role, like container shortages, port congestion, and an increase in container imports into the U.S. 

What shippers can do 

Shippers can’t expect the current market volatility to go away anytime soon. As a result, they’ll need to play the spot market strategically.  

With capacity tight and rates rising, shippers shouldn’t risk limiting their cargo to one specific carrier. They also shouldn’t confine their shipments to a single port given the challenges that some regions are experiencing – or could soon be experiencing – with congestion and potential strikes. Instead, shippers should consider diversifying their options to have greater flexibility in the carriers, capacity, and ports that they can use.  

An established NVO that has relationships with all of the major ocean carrier alliances can give shippers access to more carriers, capacity, sailing schedules, and ports. When the market is challenging, we’re working through these options with shippers daily, helping reroute their freight when capacity is limited or a port becomes congested. 

As shippers contend with higher ocean freight rates, uncovering savings will also be key. This can include using less than container load (LCL) shipping, where shippers only pay for the space that they use. In today’s market, LCL is also helpful to keep freight moving. For example, we’re working with customers to move some of their full container load (FCL) shipments to LCL to keep inventory levels at a manageable level while FCL capacity remains tight.   

Lastly, if shippers exhaust their options on the ocean spot market, they can work with a transportation partner to convert shipments to air or expedited LCL services. Both will be a more expensive option than standard ocean services, but they can at least help shippers deliver critical shipments on time. 

Answer with agility 

No single solution will help shippers avoid higher ocean rates. But they can potentially reduce the risk of higher rates and maintain timely deliveries by diversifying their shipping options and being adaptable during this fluctuating peak season. 

global trade river rhine water

Rhine River Shipping Halted in Southern Germany Due to High Water Levels

Shipping operations on the Rhine River remain suspended around Maxau and Mainz in southern Germany due to increased water levels following heavy rainfall, navigation authorities reported on Wednesday. The German inland waterways navigation agency halted freight shipping over the weekend as extensive flooding caused by the rain affected the region.

Read also: Climate Change: Challenges and Opportunities for Global Shipping

The high water warning center in Baden-Wuerttemberg indicated that water levels are expected to drop with the onset of drier weather. The section around Maxau is anticipated to reopen for shipping early on Friday.

Meanwhile, shipping activities on the northern sections of the Rhine, including key areas like Duisburg, Cologne, and Duesseldorf, continue to operate normally. The high water levels in the south have rendered vessels unable to pass under bridges, disrupting shipments to Switzerland.

The Rhine River is a critical route for transporting commodities such as minerals, coal, heating oil, grains, and animal feed. In recent years, the river has faced repeated challenges from low water levels due to unusually dry summers, but the current situation contrasts sharply with those conditions.

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Environmental Groups Push for Decarbonization of Maritime Shipping to Combat Pollution

Environmental advocates are urging President Joe Biden to sign an executive order to decarbonize maritime shipping at ports in Virginia and across the nation. They propose best practices to curb emissions from the industry, which is responsible for 400,000 premature deaths annually due to pollution.

Read also: Are Freight Companies Working Towards Decarbonization?

International shipping contributes to 3 percent of global greenhouse gas emissions. The International Maritime Organization aims for net-zero emissions in the industry by 2050. Antonio Santos, federal climate policy director for the nonprofit Pacific Environment, suggests that ships at anchor should utilize shore power instead of their diesel auxiliary engines.

“That they effectively not use their auxiliary engines, those diesel engines. That they’re plugged in, either to shore power,” Santos explained. “Shore power is the connections where ships can use onshore electrical power instead of their auxiliary engines.”

Additional recommendations include setting a goal-based fuel standard for ships using U.S. ports and supporting the construction of low- and zero-emission ships. Santos noted that these measures could be in place by 2040. The Biden administration is already working toward decarbonizing shipping by 2050 through the Ocean Climate Action Plan.

While some technologies to decarbonize ships are already in use, such as the electric Maid of the Mist in Niagara Falls, full-scale electrification may not be feasible for larger cargo ships. Santos pointed out that other clean fuels, such as ammonia or hydrogen, will be essential.

“Bigger ships, of course, because of the weight of the batteries, not a likely big player in the long-term solutions,” Santos observed. “Which is why they’re looking at some of these other fuel options like ammonia or hydrogen, whether that’s burned in an internal combustion engine or used in a fuel cell.”

Decarbonizing shipping is expected to significantly improve health outcomes in port communities. A National Institutes of Health report found the highest air pollution concentrations along major shipping routes, contributing to 400,000 premature deaths per year worldwide due to air pollution from shipping.

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A Strong Start to Shipping Shows Resilience on the St. Lawrence Seaway

Early tonnage reports for the 66th navigation season on the St. Lawrence Seaway indicate a robust beginning, showcasing the resilience, predictability, and sustainability of this crucial binational waterway system.

Read also: St. Lawrence Seaway Opens 58th Navigation Season

Thanks to minimal winter ice on the Great Lakes, fleet positioning was expedited, boosting grain and potash traffic. Canadian and U.S. grain shipments have surged by 39,000 metric tonnes compared to the previous year, reaching approximately 1.21 million metric tonnes so far. Similarly, potash traffic has increased by 83,000 tonnes, totaling 110,000 metric tonnes to date. Potash, encompassing various potassium-rich minerals, is essential in fertilizers for enhancing plant growth, crop yield, disease resistance, and water preservation.

“Our commitment to infrastructure renewal underpins the Seaway’s exceptional reliability. Marine transportation remains the most fuel-efficient and cost-effective method for moving goods,” stated Terence Bowles, President and CEO of the St. Lawrence Seaway Management Corporation. “A recent study highlighted that the marine industry in the Great Lakes/St. Lawrence Seaway region supports nearly 360,000 jobs and generates $66.1 billion CAD in economic activity.”

Winter maintenance investments by the Canadian St. Lawrence Seaway Management Corporation (SLSMC) and the U.S. Great Lakes St. Lawrence Seaway Development Corporation (GLS) ensure a high state of readiness and reliability. From 2019 to 2024, SLSMC invested around $379 million CAD in infrastructure renewal for Canadian assets, while GLS invested $225 million USD in U.S. assets since 2009. In addition to operating a safe, reliable, and efficient binational waterway and lock system, SLSMC and GLS are partnering with industry stakeholders on the Green Shipping Corridor Network Initiative. This effort underscores their commitment to sustainability, promoting decarbonization, and shaping a sustainable future for the marine sector.

“The Great Lakes and St. Lawrence Seaway System is crucial to North America’s economic health, supply chain strength, and our quality of life,” noted Adam Tindall-Schlicht, Administrator of the Great Lakes St. Lawrence Seaway Development Corporation. “We embrace the significant responsibility of managing this vital infrastructure, meeting it with planning, dedication, and continuous investment to exceed the expectations of businesses and consumers relying on us daily. I thank our team and partners for their continuous efforts and wish all Seaway users a successful shipping season.”

Tonnage statistics for May are forthcoming and are anticipated to show continued positive trends as the St. Lawrence Seaway’s navigation season progresses.

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Increasing Insurance Risks for Marine Shipping 

Marine insurance, hull and cargo specifically, is one of the oldest forms of insurance according to researchers and industry professionals alike. The basics of coverage date back over four thousand years to the Babylonians. Given the nature of marine shipping, the entire transit journey carries agreed levels of uncertainty and when unexpected issues, such as war or natural disasters strike, the process becomes upended. One geographic region can have an outsized impact across the globe, as current issues in the Red Sea and Black Sea – not to mention the rise of piracy in the Indian Ocean and weather problems in the Panama Canal – all demonstrate. This confluence is causing delays, complicating logistics and blowing up budgets. While these matters are not new to marine shipping (weather for one, is a continual factor), the effects are exacerbated because they are happening concurrently, creating a “butterfly effect” across the globe.

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

Perhaps the most pressing challenge facing the industry is the conflict in the Red Sea. Since October 2023, conflict with the Houthis has been a lethal problem for cargo ships attempting to pass through the Suez Canal. A report from the United Nations Conference on Trade and Development found that in January 2024, there was a 42% decrease in ships passing through the Suez Canal to avoid the conflict. While some ships are granted safe passage based on nationality, there are no guarantees for the thousands of others regularly passing through the canal. 

Cargo crews and their ships have two options for their rerouted journeys. The first is to go around the African continent at the Cape of Good Hope, adding at least 10 days to their travel time (and considerable additional expense). However, this option is not available on every route. The second is to pass through the conflict zone in the Red Sea, which many companies have opted to do with an added war risk insurance and unsurprisingly an increased cost. Both options come with rate increases that most shipping companies had not previously budgeted (previously, rates were sitting around .05% and now hover around 1%).

Rates are also increasing in the Indian Ocean, as pirates in the area are growing more brazen, commandeering larger ships and attacking vessels that are farther out to sea. This increase in frequency and area of strikes is challenging even for larger cargo. War risk rates in the Indian Ocean show a similar increase to the ones in the Red Sea, up to around 1%. 

While shipping in the Eastern Hemisphere faces conflict issues, the Western Hemisphere is having problems with low water levels in the Panama Canal wreaking havoc on shipping timelines. El Niño, the weather pattern that drastically affects the climate in Central America and surrounding areas, coupled with a devastating drought in the region has caused water levels to drop in the nearby Gatún Lake which forms a major part of the Panama Canal. As a result, there is not enough water in the canal’s complex lock system. Every time a ship goes through the lock system more water is dumped back into the ocean, thereby causing additional water loss in the lake. To mitigate the water level issue, officials at the Panama Canal have limited the number of ships that can pass through the canal daily. However, this well-intentioned measure has created a backlog of ships waiting to cross, and crews who need to pass through the canal now need to budget for increased transit time, more supplies, and crew. Marine shipping companies traveling through the Panama Canal should consider increased delay and delivery limits to offset the potential exposures while waiting to pass through the canal. 

As these factors affect marine shipping, the shippers of the cargo should better understand their options to navigate the issue areas. Depending on the destination, journey length, ship owner, and more, shippers for the cargo can decide which strategy makes the most sense, and what risks they are willing to take. The marine shipping industry can mitigate transit risks and exposures through a combination of insurance coverages, increased limits and carefully crafted policies. A good insurance broker will collaborate with their shipper of the cargo client to identify policies that should be added or removed depending on the issues a ship might face on its journey. As frustrating as these issues are for everyone involved, there will be gradual change to resolve these problems, and marine shipping will sail again to its standard operation.

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

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. 

Read also: Navy Secretary Endorses Plan to Revitalize U.S. Maritime Industry

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.