Author: global

Maersk sees container demand slowing as recession looms

Maersk sees container demand slowing as recession looms

Shipping group Maersk (MAERSKb.CO) warned on Wednesday of slowing demand for transport and logistics as a global recession looms and cut its forecast for container demand this year, even as it beat third-quarter earnings expectations.

“It is clear that freight rates have peaked and started to normalize during the quarter, driven by both decreasing demand and easing of supply chain congestion,” Chief Executive Soeren Skou said in a statement.

The company’s shares were down 4.4% at 0839 GMT, and have now fallen 38% since hitting a record high of 24,920 Danish crowns on Jan. 13.

The Copenhagen-based company, one of the world’s biggest container shippers with a market share of around 17%, is often seen as a barometer of global trade.

“With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon,” Skou said.

Maersk now sees global container demand falling by 2% to 4% this year, citing an unfolding economic slowdown expected to continue into 2023. Its previous guidance was for an outcome towards the lower end of a range of minus 1% to plus 1%.

Freight rates surged in step with higher consumer demand during the pandemic, resulting in congested ports and delays, and while those rates have since come down, containers still cost more to ship than before the pandemic.

Climate change will impact port infrastructure in the coming decades

A scientific publication led by the academic from the University of Valparaíso and researcher from the ANID CIGIDEN Center, Patricio Winckler, addressed the impact of climate on the operating conditions of seven large state ports in Chile, a system that plays a strategic role for our integration with the world, since it transfers approximately 90% of international trade.

As a whole, the Chilean port system is made up of 28 major ports, 19 of which are exposed to the Pacific Ocean. During tidal waves, port operations at these ports are suspended to ensure the safety of ships, cargo and workers. This phenomenon, however, has been little studied to date, even though the costs associated with port closures amounted to 345 million dollars for the national economy in 2020 alone.

The recent study “Impacts in ports on a tectonically active coast for climate-driven projections under the RCP 8.5 scenario: 7 Chilean ports under scrutiny”, published in the scientific journal Coastal Engineering Journal, aims precisely at understanding how climate change would affect the system port.

Specifically, Winckler, together with the UV ocean civil engineers, Javiera Mora and César Esparza, the UV Ocean Civil Engineering professor Manuel Contreras-López, and academics from the UC and the University of Davis, calculated the impact on port operations due to eventual port closures and the effects that swells and sea levels can generate on port infrastructure under a pessimistic climate change scenario (RCP 8.5).

· Historical evidence The study begins by showing that port closures amounted to 17,153 hours in the ports analyzed between 2008 and 2018, which implied annual losses of 18 million dollars only for dockage and cargo transfer services in the cases analyzed. These values ​​do not consider the costs associated with the entire logistics chain of merchandise transport and, in short, translates into an increase in prices. “In just one decade, port closures increased from 17 hours in 2008 to 3,022 hours in 2018 in all the sites analyzed, which could be associated with an increase in the frequency of storm surges and greater demands to guarantee the safety of the ports. maneuvers of the large container ships that arrive in Chile”, explains Patricio Winckler. The analysis also shows that, although the northern ports are quite far from the wave generation areas in the South Pacific Ocean, they were the most affected, with 310, 100 and 1,088 hours per year for Arica, Iquique and Antofagasta, respectively. . Ports located in the central and southern regions of Chile, in contrast, had comparatively less downtime.

· Port operational conditionsTo assess the effects associated with climate change on port operations, the team calculated the wave climate for a historical period (1985-2004), mid-century (2026-2045) and end of the century (2081-2100), with a generation model for the entire Pacific. According to the Valparaíso University expert, this statistic was then transferred to each port using spectral models that rescue coastal propagation processes, where downtime was calculated by comparing wave heights with minimum criteria that allow access maneuvers. , mooring and permanence of ships in the mooring sites. The results show that some ports would reduce and others would increase downtime for mid-century projections due to local effects. Thus, operating conditions would deteriorate in the ports of Iquique and Antofagasta, would improve slightly in Valparaíso and San Antonio, and would improve significantly in San Vicente. Arica and Coquimbo would not experience relevant changes. “By the end of the century, however, all ports would experience an improvement in operational conditions, since, with climate change, the average waves will be generated further south, reaching the coasts of central and northern Chile, with less Energy. That translates into a reduction in the expected number of port closures and an associated economic benefit,” explains Winckler. The CIGIDEN expert complements that in the next 30 or 40 years, the climate system will be displaced to the south and the waves, on average, will reach the central zone with a little less energy. “That could be probabilistically beneficial, because the amount of swell could eventually decrease, which could lead to an improvement in the operational conditions of some ports.”

· Structural damageFrom the point of view of port infrastructure, Winckler warns, we are going to experience a rise in sea level which, combined with tidal waves, will result in a greater overpass and therefore greater structural damage to shelter works, which meet the function of reducing the action of the waves and, eventually, the wind of the port works. “This generates economic losses associated with the repair and lost profits. In addition, the overcoming of the waves would reduce the safety of pedestrians on seafront promenades and of workers in port areas”, he warns. The CIGIDEN expert indicates that the preventive maintenance and repair of existing works should be a priority for State agencies and concessionaires: “We must review those structures that are very old and have been hit by large earthquakes, tsunamis and tidal waves in Chile and Based on this, define adaptation measures”. The engineer concludes by exhorting the world of academia and consultancy to abandon the traditional design procedures for port infrastructure and incorporate climate change in the definition of the design conditions for future works.

Climate change will impact port infrastructure in the coming decades
Panama Canal reports drop in container cargo transiting through its Neopanamax locks

Panama Canal reports drop in container cargo transiting through its Neopanamax locks

The Panama Canal reported a surprising drop in container cargo transiting its Neopanamax locks during fiscal year 2022 (which runs from October to September), falling from 51.2 million to 50.2 million. By contrast, the amount of containerized cargo transported through the traditional locks increased from 10.0 million to 12.1 million tons, Alphaliner reported.

The number of transits is similar: the number of container ship trips registered in the “old” locks increased from 1,003 to 1,175 in the year 2022, which represents an increase of 17%. Transits also increase at the neo-Panamax locks, but by a much smaller percentage, from 1,599 to 1,647, or a 3% increase.

Overall, the Canal missed a modest increase in the number of container ships using the waterway (both locks) during the year, despite the frenetic nature of the pandemic trade. Total transits decreased 8% year-on-year to 2,822 as many ships abandoned their regular sailing schedule for more lucrative operations on the trans-Pacific route.

Ballast traffic increased slightly on the Canal, especially northbound, but most of the year’s growth came from northbound cargo traffic, which was up 10% versus 5% southbound.

After two years of shipping snarls, things are starting to turn around

After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of waning demand from Western economies and softer global economic conditions, logistics data shows.

Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged, data shows.

“The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday.

“On the other hand, the congestion is easing with vessel waiting times reducing, ports operating at less capacity, and the container turnaround times decreasing which ultimately, frees up the capacity in the market.”

The latest Drewry composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s 64% lower than the same time last September after falling 32 weeks in a row, Drewry said in a recent update.The current index is much lower than record-high prices of over $10,000 during the height of the pandemic but still remains 160% higher than pre-pandemic rates of $1,420.

According to Drewry, freight rates on major routes have also fallen. Costs for routes like Shanghai-Rotterdam and Shanghai-New York have fallen by up to 13%.

The falling freight rates tie in with a “sharp drop” in container shipments that Nomura Bank has observed.

Nomura, quoting data from U.S.-based Descartes Datamyne, said container shipments from Asia to the U.S. for all products except rubber products in September are down year on year.

“We assume that the sharp drop in container shipments largely reflects US retailers stopping orders and reducing inventories due to the risk of an economic slowdown,” Nomura analyst Masaharu Hirokane said in a note on Wednesday, adding that the bank has yet to see signs of a sharp fall in U.S. retail sales.

Port throughput around the world has also dropped. When Shanghai reopened after its recent lockdowns, port traffic volumes lifted but weren’t enough to offset the “wider downturn in port handling levels,” Drewry said.

What’s different now

In Europe, sliding container prices and rates reflect declining consumer confidence, Container xChange said.

“The European market is finding itself flooded with 40-foot high-cube containers. As a result, the region is experiencing a fall in the prices of these boxes,” Container xChange said.

The trends in logistics and supply chains from the past two years have reversed, logistics companies said. During that period, container shortages were constant as a result of delays at ports affected by lockdowns and soaring demand.

After two years of shipping snarls, things are starting to turn around
DP World adds new trade routes to open global markets, ease supply chain congestion

DP World adds new trade routes to open global markets, ease supply chain congestion

UAE-based global logistics major DP World said it added more than 23,000 nautical miles of new trade routes across the globe, including connections between India, Middle East and Africa, and new connections between Latin America, Europe and Asia during January-September this year.

The new routes, which also included multiple new routes connecting smaller ports with Rotterdam in Europe, have enabled opening new trading opportunities for cargo owners, better access to goods and services for underserved populations, besides providing alternatives to globally congested routes and ports across the globe, the company said.

Tiemen Meester, chief operating officer of ports & terminals at DP World, said the new routes provided Central American fruit suppliers access to Asia, the UK and Western Europe, and African citrus growers access to new markets in the Middle East and South Asia.

“We use cutting-edge innovations that create new ways to take goods to market where none exist or add alternatives where supply chains are subpar,” Meester said.

DP World’s route expansions this year also include a new route connecting Ecuador’s fruit and cocoa producers to Asia for the first time.

French shipping line CMA CGM launched a new service in August from DP World Posorja at Guayaquil port, connecting the country to Asia. This new direct connection route uses 11 vessels on rotation, improving transit times to Asia.

After three years of uninterrupted operations at Posorja, the new service will help position Guayaquil and Ecuador as a key hub, not just for the west coast of South America, but also the South Pacific.

The route expansions are part of DP World’s efforts to provide end-to-end logistics solutions, enabling seamless movement of goods from the point of production to the end user through innovative technology and global intermodal transportation services across shipping, rail and road, the company said.

Golden Week in China: How logistics comes to a standstill

Golden Week is a national holiday in China that lasts for seven days. It is typically celebrated from October 1-7 and is a time for Chinese citizens to travel and visit family. This holiday can have a significant impact on logistics due to the increased demand for travel both within China and internationally.

What is the Chinese Golden Week?

As one of the world’s biggest and most important markets, China faces huge pressure on its logistical infrastructures to maintain a certain level of productivity and efficiency to keep the global supply chain oiled, running, and stable.

From factories and warehouses to ports, terminals, and more, Chinese workers across all logistical sectors clock long hours all year round to ensure the upkeep of the supply network worldwide.

But twice a year, the world’s largest exporter permits itself a break.

Known as the Golden Week in China, there are two such week-long respites in the country — one in each half of the year.

The first, known as the Chinese Lunar New Year Golden Week, is at the start of the year in January/February to give people time off to celebrate the Chinese New Year.

The second, the National Day Golden Week, is part of the country’s national day celebrations and happens in October — right in the middle of the shipping peak season.

Given China’s influence on the global market and world trade, a week-long —albeit anticipated— lull has the potential to cause chaos on supply chain operations and rippling effects and logistical delays around the world.

In this article, we’ll be focusing on the National Day Golden Week in October. But to understand how the National Day Golden Week in China affects logistics, we must first dive into some basic facts about the holiday.

When is the Golden Week in China?

The National Golden Week in China takes place in the first week of October every year to celebrate the founding of the People’s Republic of China.

The Chinese Golden Week runs every year from the 1 October (Tuesday) to the 7 October (Monday).

What happens during the Golden Week in China?

During the Golden Week in China, workers take a break from the hustles and bustles of life. Throngs of travellers crowd trains, buses, airports, to either get home to visit their families or travel.

And while China deals with the travel logistics of its Golden Week, the rest of the world grapples with the impact this has on their supply chain logistics.

Over the course of the Golden Week, factories across the country close and production comes to a standstill. Likewise, at ports and terminals, work and personnel are reduced to the bare minimum.

With operations running at a tiny fraction of full speed, productivity and efficiency levels shrink and it becomes logistically impossible for exporters and importers to get their goods moving into and out of China.

That means that all the action has to take place before the festivities begin.

How China Golden Week affects logistics

In the weeks leading up to the China Golden Week, demand for Chinese exports skyrockets as businesses attempt to get their exports out before operations in China completely shut down.

In response to the activity deficit, shipping carriers often announce service cuts.

At the time of writing, two of the main shipping alliances have announced cuts of 15 weekly sailings from Asia to North America:

  • Nine to the West Coast
  • Four to the East Coast
  • Two to the Gulf Coast

Even post-Golden Week, capacity and personnel often remain limited and production can be slow to pick up. Carriers may also continue to cancel sailings in the weeks that follow.

That said, failure to get your merchandise into or out of China before the festivities may result in dire consequences, as delays from the Golden Week can sometimes last for months.

For businesses, this may translate to potential breaches in contracts, accruing delay fees, low sales figures, and so on.

The Golden Week Effect on Sea Freight, Air Freight, and Rail Freight

The effect of Golden Week on China’s transportation infrastructure is significant.

During Golden Week, China’s seaports and airports are often congested with travelers and freight. For example, the number of containers handled at the Port of Shanghai typically surges during Golden Week. This can lead to delays in loading and unloading ships and in the movement of containers to and from inland destinations.

The increased demand for transportation services during Golden Week can also lead to higher air and rail freight prices. This is due to the limited capacity of these transportation networks and the fact that many freight companies schedule their shipments around the holiday to avoid delays.

Golden Week can also have an impact on global supply chains. Many factories in China shut down for the holiday, which can lead to disruptions in the production of goods exported worldwide. This is particularly true for products that require parts or components from China. For example, the Golden Week shutdown of a factory that produces smartphone cases could lead to delays in shipments of those cases to other countries.

The Golden Week effect is not limited to China. It can also be seen in other countries with large numbers of Chinese tourists, such as Thailand and Japan. These countries often see an increase in tourism during Golden Week and a corresponding increase in the demand for goods and services. This can lead to higher prices for hotel rooms, restaurants, and other tourist attractions.

The Golden Week effect on rates and availability

It is no coincidence that the Golden Week in China takes place during the shipping peak season. In fact, it is considered to be the trigger to the first wave of soaring rates, high demand, low space and equipment availability, roll-overs, and congestions.

“Technically, China’s Golden Week is what kick-starts the shipping peak season. We see the first rate increases as early as July or August as shippers fight for space.

As operations slowly resume after the Golden Week, there’s a second wave of price increases as shipping preparations for Christmas and Chinese New Year get underway.”

— Aliona Yurlova, International Business Development Expert at iContainers

High demand, low space and equipment availability, roll-overs, and congestions are synonymous with both the China Golden Week and the shipping peak season.

But how are they a direct factor of the fluctuating and soaring shipping costs?

High demand and low availability

In the weeks prior to the start of the Golden Week, demand for exports out of China surge.

This is in anticipation of the shutdown as businesses importing from China try to secure a spot on outgoing vessels to ensure their goods are out of the country before production in the world’s largest exporter comes to a halt.

In response to this rising demand, shipping carriers increase spot rates. As of the beginning of September, spot rates from China to the North American West Coast is at its highest level in two months.

Amid this rush, the industry also faces scarcity of containers, slots, truckers, and everything in between. Shippers should be prepared to fork out more to secure not only a slot on a container vessel, but also for the equipment required for their shipments.

The standard General Rate Increases (GRIs) aside, there are also other surcharges to consider.

Given the higher demand for Chinese exports in comparison with Chinese imports, there’s often an urgent need containers to be returned to the terminal to manage the demand at Chinese ports.

This is when carriers begin implementing surcharges such as the Equipment Imbalance Surcharge (EIS) to compensate for the cost of ferrying empty containers back to Chinese ports to meet export demand.

Differing Golden Week strategies by carriers

The import-export imbalance caused by China’s National Day Golden Week also prompts vastly differing rate strategies by shipping carriers.

Despite the falling demand for Chinese imports, larger and more influential carriers, which have the benefit of a superior service (direct routes and shorter transit times) and reputation, tend to maintain their rates instead of lowering them to encourage sales.

In the event that there’s insufficient cargo to warrant a sailing, blank sailings and service cuts are normally announced. This is also to prevent FAK spot rates from falling below market level. As a result, ports often become more congested with rolled containers.

Smaller and Asian carriers, on the other hand, manage the softening import demand by lowering their rates. This is done even at a loss as they expect to be able to recover from the significantly higher rates for Chinese exports.

“Given this scenario, more cargo headed for China end up being booked with smaller carriers offering lower import rates. But given their limited capacity, this often results in the failure to match demand and cargo ends up getting rolled.

It’s this and the larger carriers’ blank sailings that contribute to the congestion we see before the Golden Week in China.”

— Aliona Yurlova

Is the Golden Week relevant only if you ship goods from or to China?

Golden Week is a national holiday in China, and many businesses close for the week. This can lead to disruptions in the supply chain, especially if your business relies on goods from or to China. If you’re shipping goods from or to China during Golden Week, it’s important to plan and allow extra time for delays.

Opportunity for some businesses

For there to be a loser, there must be a winner.

Despite the potential chaos the China Golden Week may cause to businesses, if managed properly, some companies can actually benefit from the operational shutdown in China.

Travel and consumption —both domestic and abroad— soar during the week-long holiday.

In 2021, nearly 700 million Chinese traveled domestically and abroad during the October Golden Week. Most visited neighboring Asian territories including Japan, Thailand, Hong Kong, and South Korea.

Domestically, the Golden Week consumption in 2020 reached $68.8 billion.

As an exporter, getting your merchandise into China and the popular holiday destinations of Chinese tourists in time for Golden Week could help to lift sales.

The boost to these neighboring territories doesn’t only come from the holidaying Chinese.

As Chinese production shuts down, overseas SMEs may begin looking at neighboring countries as an alternative source for their imports.

These are great opportunities for alternative markets and providers. Vietnam, for example, recently signed a free trade agreement with the EU. This may result in a European push towards Vietnamese imports instead of China.

Going by the same logic, SMEs may also turn to their local distributors, given that importing from China during the Golden Week isn’t an option.

Golden Week in China: How logistics comes to a standstill
Evergreen’s 2nd 24,000 TEU behemoth delivered

Evergreen’s 2nd 24,000 TEU behemoth delivered

Taiwanese shipping firm Evergreen Marine has taken delivery of the second 24,000 TEU containership from Hudong–Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation.

The ultra-large boxship, named Ever Aria, is a sister ship to Ever Alot, which was delivered to the container shipping company in June this year. Both boxships have been flagged in Panama. The duo has claimed the title of the world’s largest containerships.

The delivery was announced on September 13, twelve days ahead of schedule, the shipbuilder said.

Ever Aria is part of nine vessels being built by Hudong-Zhonghua Shipbuilding in China to ABS class.

The 24,000 TEU containerships have been independently designed by Hudong Zhonghua, and they are fitted with a myriad of green features including high efficiency, energy-saving, and safety solutions in line with Tier III emission requirements.

As disclosed, the ships have a bulbous bow design, large-diameter propellers, and energy-saving ducts to ensure low energy consumption. They are also fitted with hybrid scrubbers.

The 400-meter megamax-24 type ship will serve ports between Asia and Europe. It can load more than 24,000 standard containers at a time, and the maximum stacking layer can reach 25 layers, which is equivalent to the height of a 22-story building. According to its builder, it can carry 10% more weight than a 23,000 TEU containership.

One more vessel from the series is expected to be delivered by the end of this year, while another five ships are at different stages of construction.

World’s largest container line is rerouting its fleet to avoid collisions with endangered blue whales, the largest animals on earth

The largest container line in the world has rerouted its ships passing near the coast of Sri Lanka in order to avoid potential collisions with endangered blue whales.

“MSC Mediterranean Shipping Company has taken a major step to help protect blue whales and other cetaceans living and feeding in the waters off the coast of Sri Lanka by modifying navigation guidance in line with the advice of scientists and other key actors in the maritime sector,” MSC said in a statement provided to Insider.

MSC said the action was taken in response to research conducted by the International Fund for Animal Welfare (IFAW) along with other groups and universities. The vessels passing through Sri Lanka’s coastal waters will now travel about 15 nautical miles to the south from the previous route.

Blue whales can be found year-round off the southern tip of Sri Lanka in the Indian Ocean, resulting in a high risk of collisions as the usual international shipping lanes pass right through the area where most of the whales congregate, the IFAW said in a statementpraising MSC’s rerouting.

 

“By ensuring these small changes, MSC is making a significant difference for these endangered whales. Whales often die as a result of collisions and this population is at risk. Ship strikes are both a conservation and a welfare problem, and even one whale death is one too many,” Sharon Livermore, the director of marine conservation at IFAW, said.

MSC’s voluntary rerouting does not impact other shipping carriers, but advocates hope their decision could help lead to permanent changes to the official shipping lane that would impact all vessels. Research conducted on the area’s blue whale population found that adjusting the shipping lane would reduce the risk of a ship striking a whale by 95%, according to IFWA.

 

“Re-routeing is the key hope to turn the tide for blue whales off Sri Lanka. It also demonstrates to the Sri Lankan government that now is the time to take appropriate action and move the shipping lane out of blue whale habitat for all merchant vessels,” Nicolas Entrup, the director of International Relations at OceanCare, said.

Blue whales are the largest living animals on earth. They can reach 80 to 100 feet in length and live for 70 to 80 years. The International Union for Conservation of Nature lists blue whales as endangered, noting the species was hunted to the brink of extinction by the 1960s, at which time it was given international protections.

 

While hunting blue whales is prohibited, the species continues to be threatened, primarily due to declines in its primary food source, krill. The decline in krill has been linked to the climate crisis, ocean acidification, and other factors.

MSC became the largest container line in the world earlier this year, with a fleet capable of carrying 4.3 million standard 20-foot containers.

World’s largest container line is rerouting its fleet to avoid collisions with endangered blue whales, the largest animals on earth
TotalEnergies Marine Fuels Completes COSCO SHIPPING Lines’ First Bunkering of Marine Biofuel

TotalEnergies Marine Fuels Completes COSCO SHIPPING Lines’ First Bunkering of Marine Biofuel

TotalEnergies Marine Fuels has successfully completed the first refuelling of a COSCO Shipping Lines containership with sustainable marine biofuel. This operation marks TotalEnergies’ first biofuel bunkering operation for a containership in Singapore.

On 11th July 2022, the 4,250 TEU COSCO HOUSTON container vessel was bunkered with TotalEnergies-supplied biofuel in Singapore waters, via ship-to-ship transfer. VLSFO (Very Low Sulfur Fuel Oil) blended with 20% second-generation, waste-based and ISCC-certified UCOME (Used Cooking Oil Methyl Ester), was bunkered via an operation that was made possible with support from the Maritime and Port Authority of Singapore (MPA) and the involvement of local partners such as tank storage company, Vopak Terminals Singapore at Penjuru.

From a well-to-wake assessment, the biofuel will reduce approximately 17% of Greenhouse Gas (GHG) emissions compared with conventional fuel oil. The biofuel has been consumed during the container vessel’s voyage to Jakarta, Indonesia.

Laura Ong, General Manager of Trading and Operations for Asia Pacific, TotalEnergies Marine Fuels, based in Singapore, said: “We are honoured to partner COSCO Shipping Lines, one of the world’s largest container shipping companies, in their decarbonization journey with the provision of their first biofuel bunker stem. This successful collaboration lays a foundation for both companies to explore new joint initiatives that promote the introduction of clean, low-carbon alternative fuels.”

Laura added: “This milestone bio-bunkering operation also further validates the important role of biofuels in decarbonizing conventional marine fuels, and the potential greenhouse gas reduction gains it can bring to existing vessels. In line with TotalEnergies’ climate ambition to reach net-zero emissions by 2050 together with society, we will continue to scale up our biofuel capabilities and to support the growing interest for sustainable marine biofuels in this region.”

 

This operation follows successful biofuel bunkering trials that TotalEnergies Marine Fuels performed in Singapore with a vehicle carrier operated by Mitsui O.S.K. Lines, Ltd. (MOL) and a bulk carrier chartered by NYK Line this year.

Biofuels as a Marine Fuel
Biofuels provide an immediate and sustainable solution to decarbonize shipping today, as they can be blended or dropped into existing conventional fuels with little or no technological developments required on vessels.

As part of TotalEnergies’ strategy to produce a new generation of biofuels for use in transport, TotalEnergies is investing in advanced biofuels projects based on sustainable feedstock , thereby sourcing from the circular economy and limiting the competition for and impact on arable land.

These initiatives reinforce TotalEnergies’ climate ambition to reach net-zero emissions by 2050 together with society. In parallel, TotalEnergies Marine Fuels is committed to drive the decarbonization of shipping through the provision of clean and low-carbon marine fuel solutions across the short and long-term.

Panama Canal Calls on Ships to Protect Marine Life as Nearby Annual Migration Begins

By promoting seasonal traffic lanes and speed limits, the waterway hopes to considerably decrease the risk of vessels striking migrating whales and other large aquatic mammals.
Starting August 1, 2022, through November 30, 2022, the Panama Canal is calling on vessels to follow annual speed and navigational measures to prevent collisions with whales, dolphins, and other large aquatic mammals beginning their seasonal migration nearby the waterway.

Vessels sailing to and from the Canal during this period are asked to stay within designated navigation areas known as Traffic Separation Schemes (TSS), which minimize areas of overlap between vessels and migrating marine life. The annual measures set by the International Maritime Organization (IMO) also require that vessels entering or exiting the Canal via the Pacific Ocean keep their speed at or below 10 knots, a practice known as Vessel Speed Reduction (VSR).

“As facilitators of global maritime trade, it is our responsibility to minimize the environmental impacts of our operations,” said Panama Canal Administrator Ricaurte Vásquez Morales. “These measures represent some of the simple, yet critical ways the Panama Canal and shipping lines must work together to ensure a more sustainable future for world commerce.”

Since the TSS measures were introduced in 2014, the likelihood of serious incidents has decreased considerably for vessels and marine life, including for humpback whales, which migrate from northern and southern latitudes during their winter season to Panama’s warm waters to give birth and to raise their calves. According to the Smithsonian Tropical Research Institute (STRI), ship strikes are among the most concerning human threats to whale populations, though lowering vessel speed can give the mammals sufficient time to respond and avoid collisions with vessels, while also allowing vessels to stop or maneuver accordingly. A STRI study confirmed that fatal accidents between whales and vessels were 38 percent lower between 2017 and 2019 when compared between 2009 and 2011, before the TSS measures were implemented.

The TSS policies have also been found to bolster maritime safety and reductions of greenhouse gas (GHG) emissions. Data obtained by the Panama Canal from vessels’ automatic identification systems (AIS) individual automatic ship identification systems found that those who followed these measures between 2017 and 2021 saved more than 30,000 tons of CO2 in total, though results vary by vessel type, size, and fuel.

The annual TSS program shows how making a few small changes can lead to outsized benefits when it comes to sustainability,” said Maxim Rebolledo, Environmental Specialist at the Panama Canal. “We appreciate our customers for their partnership on this issue and the Panama Canal’s broader efforts to safeguard the environment.”

As the only major waterway that relies on freshwater, and a leader in global trade and the maritime industry, the Panama Canal implements initiatives to maximize environmental and operations efficiencies with a positive impact on the reduction of GHG. Since its inception, the Panama Canal has reduced over 850 million tons of CO2. Today, the Panama Canal continues being a strong supporter of, and an active participant in, the creation of the IMO’s industry-wide regulations.
Source: The Panama Canal Authority (ACP)

Panama Canal Calls on Ships to Protect Marine Life as Nearby Annual Migration Begins