Shipping lines won’t pay for reduced emissions by terminal operators

Speaking at TOC Asia Datuk Ruben Emir Gnanalingham, Executive Chairman and Group Managing Director of Westport Holdings did not pull his punches when it came to a lack  of willingness to pay for reduced emissions by terminal operators.

Gnanalingham stated the cause of emissions was ultimately consumers.  The problem is he said that studies show only 20% are willing to pay more to reduce emissions and that of those 20% very few were willing to pay a lot. This issue of not being willing to pay is amplified when it comes to container shipping and their customers.

“If you don’t have ROI backing your plan it’s not going to work especially in the container shipping industry where everyone is basically a low cost carrier,” he said.

“I know some shipping lines say they prefer service over price, but I can tell you all shippers care about is price. They don’t care about service, they pretend to care delivery comes on time, but actually price is the most important part.”

This then passes on down the line to Westports in terms of price pressure and a lack of willingness to pay for reduced emission by the terminal operator. “None of these customers [shipping lines] are willing to pay more and it’s because none of their customers are willing to pay more.”

For its own decarbonisation Westports is exploring using alternative fuels including a couple of electric trucks. However, the EVs have not proved as green as hoped due to the electricity supplied by the Malaysian power grid. “I think the problem there is in Malaysia the grid is so dirty that actually electrification means higher emissions,” Gnanalingham shared. Emission from the electric trucks were actually 50% higher than using diesel.

 “Electrification does not always make sense,” he stated. However, a different case is seen for the electrification of RTGs in the yard.

When it comes to Scope to emissions the port has installed a solar panels for lighting and air conditioning and is exploring wind energy given the port sits on the Malacca Straits.

In terms of Scope 3 the port is waiting to see where shipping companies commit in terms of alternatives fuels. Gnanalingham noted that all alternative powered vessels were dual-fuel but none seemed committed to a single fuel.