At this year’s Global Liner Shipping & Shipping2030 Asia, we gathered some of the most prominent thought leaders, and asked them to share their views on the hottest topics in shipping and maritime.
Nicholas Sartini, Chief Executive Officer of APL, joined a panel ‘What is keeping you up at night?’, and in this interview he will be elaborating on the matter.
Watch the video or read the transcript below.
Lili Nguyen: What is keeping you up at night?
Nicholas Sartini: Shipping is keeping you awake night and day. This is the good thing about shipping, and as usual, we have very positive news, and we have some concerns.
On the positive side, our industry is growing. We will probably end our year with a 5% growth. The industry will have carried 200 million teus this year, so 5% growth means 10 million containers in addition between carriers. So, it’s big, and it’s exciting, and it means we have opportunities.
At the same time, we have a lot of challenges, I must say, maybe more this year than in previous years. Fuel has a big impact on us, and we have a lot of geopolitical issues. APL is a big carrier on the trans-Pacific, so the most prominent one for us is the China-US trade war. We are only seeing the beginning of this and we are not even in round 3 in the tariff increase.
So far, paradoxically, the volumes have been very strong, probably from a mixture of good growth in the US market and the US consignees’ anticipation of the sanctions, so they have the ships and cargo earlier than they would normally. So, volumes have been strong, but down the line, there are a lot of questions marks.
LN: Will LNG be the only alternative fuel you are looking into? What about scrubbers or low sulphur fuels?
NS: The global sulphur cap 2020 regulation is a very big issue for the industry. On the positive side, I think it’s a good measure for the environment. Fuel is a hazard, and it’s not good for ships to be emitting too much fuel. From this point of view, it is good, and we support it, but at the same time, it comes with a cost.
There will be three ways to obey this new regulation. One way is to consume 0.5% fuel, which is extremely expensive. Two, invest in LNG, as CMA CGM has done as a group. But LNG is only a partial solution. Out of 500 teus owned by the group, maybe only 10 will be equipped with LNG. And the last solution, which is also very expensive, is to equip the vessels with scrubbers.
These partial solutions will be around and will be employed by the CMA CGM Group but basically, we will have to deal with 0.5% fuel, and this is going to be a huge additional burden and bill for the company. This is why we are taking advantage of this forum to inform our customers and our shippers that they will need to pay for this additional cost. As a group, we have come up with an amount so that shippers can be prepared for a $160/teu.
LN: Can you tell us about your decarbonisation strategy?
NS: This is something that has been on-going at APL for several years now. We have probably started 10 years ago, and we have fixed some very ambitious and aggressive targets. Last year (2017), we reached an [emission] reduction of 50% compared to 2009! We have done that by several measures. We have adjusted the speed of our vessels; we have taken a lot of technical measures; we have changed the bulbous valve in our vessels to make it more fuel efficient.
Of course, we will continue the efforts. We will continue to invest in technology, we will adjust the speed of our ships further to continue to reduce carbon emission on our vessels.
