Subscribe

Tag: Shipping

UK-EU Deal Boosts Cross Channel Freight

Posted on by Peter MacLeod

The Port of Dover has welcomed the UK-EU deal announced today, which represents a significant and positive step forward in resetting and strengthening the vital cross-Channel economic relationship. As the UK’s primary gateway for trade with the European Union – handling approximately one third of all UK-EU goods trade – Dover is uniquely placed to see the tangible benefits that reduced border frictions will bring.

“We particularly welcome commitments to simplifying trading and travel arrangements and removing barriers such as Sanitary and Phytosanitary (SPS) checks on animal and plant products, which we hope to see implemented as quickly as possible,” said a Port spokesperson.

Short Straits

“This deal directly reflects the priorities discussed at our recent Short Straits Summit, where leaders across maritime, logistics, infrastructure, government, and business called for frictionless trade, regulatory cooperation, and a shared commitment to innovation and decarbonisation. An improvement in border processes will not only restore confidence for businesses and investors but also drive economic growth and supply chain resilience, and we are pleased to see these objectives recognised in today’s agreement.

“Looking ahead, we are committed to working with the UK Government, French Government and European Commission to implement this deal effectively and maximise shared prosperity either side of the Channel. Today’s announcement marks a fresh chapter in UK-EU collaboration, and the Port of Dover stands ready to deliver the full potential of this renewed partnership for the benefit of communities, businesses, and economies on both sides of the Channel.”

Pride of Burgundy arrives at Dover

As the UK’s busiest international ferry port and a vital gateway for the movement of people and trade, Dover handles £144 billion of trade per year, 33% of UK trade in goods with the EU and welcomes over 11 million passengers.

Supply Chain Agility

Matt Gregory, Senior Vice President of Voice & Mobility at Infios, told us: “With border checks easing on UK food exports to the EU, local food growers and manufacturers will be celebrating this opportunity for smoother sales with Europe.

“To be able to meet this potential increased demand, supply chain agility will be critical, especially in the food industry. Perishable items such as meat, dairy, fruit and vegetables require strict temperature and humidity control from the moment they leave the farm to the moment they reach the consumer. This need for consistency adds a layer of complexity to logistics.

“Technology will be critical to ensure the global supply chain can adapt to these changes. Tools such as predictive analytics can help anticipate supply issues before they occur, while real-time inventory tracking allows businesses to stay ahead of shortages and avoid overstocking.

“Warehouse Management Systems can also provide retailers with a clear view of what’s in stock, where it is and when it needs replenishing, helping prevent both waste and missed sales. When integrated with Transportation Management Systems, delivery routes can be optimized, arrival schedules communicated in advance and order cycles better aligned with consumer demand.

“When factoring in temperature sensitive products, IoT-enabled monitoring systems are invaluable in tracking temperature, humidity and vehicle location in real time. This not only ensures consistent environmental conditions but also provides immediate alerts when deviations occur, allowing teams to respond before products are compromised.”

Rethink Supply Chains to Beat Seasonal Shocks

Posted on by Keith McKinley

Chocolate prices melting under pressure? Retailers must rethink their supply chains to beat seasonal shocks, according to Manhattan Associates. What can businesses can do to stay resilient in the face of raw material shortages and surging seasonal costs?

As chocolate lovers felt the pinch this Easter, with prices soaring by up to 50% according to consumer group, Which? due to a global cocoa shortage, retailers and manufacturers are once again facing questions about how to protect margins and maintain availability during peak demand periods. The supply shock – fuelled by poor harvests in major cocoa-producing nations and exacerbated by inflationary pressures – has become yet another reminder of the fragility of global supply chains when unexpected events strike.

“Seasonal surges should be predictable, but the causes behind pricing spikes like this year’s cocoa crisis are not always within retailers’ control,” commented Martin Lockwood, Senior Director, Manhattan Associates. “What is within their control is how agile and resilient their supply chains are in responding to these shocks.”

Rethinking seasonal strategy

To cope with volatile supply and costs, retailers must avoid outdated forecasting models and siloed inventory planning. Instead, they need unified, real-time insights across the supply chain to quickly respond to disruptions and rebalance stock intelligently. “Chocolate is a symbolic seasonal product, but the same principles apply across any seasonal item – from swimwear to school supplies,” said Lockwood. “Being able to pivot quickly to alternative suppliers, reroute shipments, or dynamically adjust pricing and promotions based on availability is what separates the prepared from the panicked.”

From bean to shelf – closing the gap

Onshoring and friendshoring strategies, already gaining traction due to geopolitical uncertainty, now offer additional value in smoothing seasonal demand cycles. By sourcing closer to home or building more regional fulfilment models, brands can reduce lead times and increase agility – particularly crucial for perishable or trend-driven products. “There’s no magic fix for rising cocoa costs or unpredictable harvests,” continued Lockwood. “But building a smarter, more responsive supply chain can be the difference between empty shelves and Easter success.”

Why this matters for families, not just factories

Chocolate price hikes may make headlines, but they highlight a deeper issue: how fragile global trade networks can impact everyday lives. From higher prices at checkout to product shortages in stores, supply chain volatility is now a kitchen table issue. “Consumers don’t think about supply chains until it hits their wallet – and this Easter, it has the potential to,” Lockwood noted. “Retailers must adapt not just for operational resilience, but because their ability to deliver affordable, accessible products is now a key part of maintaining customer trust.”

similar news

Google’s Logistics Partner of the Year Announced

 

DHL Suspends High-Value US Deliveries

Posted on by David Priestman

DHL Express has temporarily suspended deliveries of goods worth more than $800 to the United States, citing a “significant increase” in customs red tape linked to new tariff rules introduced by US President Donald Trump.

Starting Today (21st April 2025), the company will halt shipments from businesses in all countries to American consumers for packages above the $800 threshold, stating the move will remain in place “until further notice.” Deliveries between businesses (B2B) will continue but may also experience delays.

Previously, goods valued up to $2,500 could enter the US with minimal paperwork. However, tighter customs checks implemented alongside Trump’s recent tariffs have now lowered that threshold, triggering a spike in formal customs clearances.

DHL said this surge has strained operations:

“While we are working to scale up and manage this increase, shipments worth over $800, regardless of origin, may experience multi-day delays.”

Shipments valued under $800 will still be delivered and continue to face minimal customs scrutiny—for now. But additional changes are on the horizon. On 2 May, the White House is expected to close a loophole that allows low-value packages, particularly from China and Hong Kong, to enter the US without paying duties.

In a related move, Hongkong Post announced it is suspending all sea mail deliveries to the US and will stop accepting any parcels bound for the US starting 27 April. It described the US approach as “unreasonable, bullying and imposing tariffs abusively.”

As global shipping lanes become increasingly entangled with geopolitics and security concerns, logistics providers are facing new challenges in cross-border parcel delivery—particularly into the US.

Read Similar…

US Trade Tariffs Set to Wreak Havoc on Global Supply Chains

Adriatic Gate Welcomes MSC’s New HADRIA Service

Posted on by Will Priestman

Adriatic Gate Container Terminal (AGCT), International Container Terminal Services, Inc.’s (ICTSI) operation at the Port of Rijeka in Croatia, welcomed the commencement of the new HADRIA service by Mediterranean Shipping Company (MSC) with the maiden call of the MSC ANNICK on 9 April.

MSC’s standalone service marks a significant development for North Adriatic trade connectivity, offering direct weekly connections to the Far East via Malta.

“With the breakup of the 2M Alliance, we are excited to welcome the new standalone MSC HADRIA service to AGCT,” said Emmanuel Papagiannakis, AGCT chief executive officer.

“We expect shippers to embrace the new service, as well as MSC’s global connectivity and continued commitment to Rijeka as a major gateway for the Balkans and Central Europe,” he added.

The HADRIA service makes regular weekly calls, strengthening AGCT’s network and enhancing options for regional shippers looking for reliable, efficient access to global markets. With this new addition, AGCT continues to expand its portfolio of direct services, supporting the increasing demand for sustainable and cost-effective logistics solutions in the Adriatic region.

With a rich port history with over 50 years of industry experience, we seek to take advantage of our geographic position and provide an efficient gateway to Central and South East Europe

Recognizing that we are just one part of the logistics chain, we strive provide a seamless product ensuring all rail and road hinterland connections are met and providing additional services for your container.

With continuous investment in people, new technologies and infrastructure we are committed to meet customer requirements.

Read Similar…

CMA CGM Group to acquire 35% stake in Dry Port

US Trade Tariffs Set to Wreak Havoc on Global Supply Chains

Posted on by David Priestman

The global trade landscape is bracing for further turbulence as US President Donald Trump signals that the European Union (EU) could be the next target for tariffs. Following the imposition of 25% levies on goods from Mexico and Canada, along with an additional 10% tax on imports from China, European businesses now face the possibility of similar trade barriers.

Last night (10th February 2025), President Trump confirmed higher tariffs on all steel and aluminum imports – a measure that UK producers say will prove a “devastating blow”.

Rob Shaw, GM EMEA at Fluent Commerce, warns that the market is already in an unstable, ever-changing state, and escalating tariffs could send supply chains into further disarray.

“If the US does proceed with imposing tariffs, other countries will retaliate, as we’ve already seen with China. In this scenario, tariffs may be imposed in the opposite direction, raising costs within the supply chain,” Shaw explains.

“Ultimately, it’s consumers who will bear the brunt of these changes. To protect their profit margins, businesses will inevitably pass on higher costs, placing additional financial strain on buyers already struggling with economic pressures. The exception is the luxury goods market, where high-income consumers will be able to absorb the additional costs.”

The uncertainty has placed UK and EU businesses in a state of limbo, with many preparing contingency plans in case tariffs are imposed. Some companies are considering stockpiling goods to cushion supply disruptions, though this comes with logistical and financial risks. Others are looking to invest in real-time visibility tools to better navigate inventory and supply chain fluctuations.

European Industries Facing a Catch-22 Situation

With potential tariffs looming, some of Europe’s key industries could be forced into difficult decisions. Simon Bowes, CVP Manufacturing Industry Strategy EMEA at Blue Yonder, describes the impact as a “catch-22 dilemma” for sectors like pharmaceuticals.

“Either bear the cost of relocation or absorb the tariffs and face increased costs for manufacturers and consumers,” Bowes explains.

For the luxury goods sector, the impact is expected to be less severe due to the high profit margins that can absorb additional costs. However, the European automotive industry faces a far greater threat.

“For European automotive companies, the threat of tariffs is much more significant. The industry is already struggling due to competition from China, the withdrawal of electric vehicle (EV) subsidies in key markets, and the ongoing transition to European sustainability regulation,” says Bowes.

“As the US is a critical market for European car makers, tariff threats are sending the industry to boiling point—and if placed on internal combustion engine vehicles (ICEVs), it would put a tin lid on everything that’s going bad for the industry.”

With demand for European vehicles in the US already under pressure, tariffs could significantly reduce sales volumes and accelerate production shifts to alternative markets.

Can AI and Tech Help Businesses Navigate the Crisis?

As trade tensions rise, businesses are increasingly turning to technology-driven solutions to navigate the uncertainty. Advanced supply chain management tools and AI-driven scenario modeling are emerging as critical assets for companies trying to mitigate risks.

“As tariff threats loom, businesses critically require flexible tech-led capabilities to execute strategies quickly,” says Bowes.

“Artificial intelligence (AI) can evaluate vast amounts of real-time data. Working like a GPS system, it simulates ‘what if’ scenarios tailored to different variables, meaning businesses can strategically decide the best course of action, whether that is using new suppliers, using a co-manufacturer, or absorbing tariff costs.”

Will Other Countries Retaliate?

One of the most pressing concerns is whether the US tariff strategy will provoke widespread retaliation, leading to a global trade war. If that happens, the ability of businesses to leverage international specialization—such as Taiwan’s semiconductor industry or Germany’s automotive expertise—could be significantly disrupted.

“If US tariffs are imposed, it could set off a chain reaction across the globe,” Bowes warns.

“The rise of tariffs would likely stifle competition and innovation, and while some industries could benefit from protectionism, others would undoubtedly face higher costs and reduced market access.”

The Road Ahead: A Waiting Game for Global Markets

With no immediate resolution in sight, businesses across the UK, EU, and beyond remain in a tense waiting game. If President Trump follows through with EU tariffs, companies will need to adapt quickly—whether through price adjustments, supply chain restructuring, or technological investment.

As global trade remains volatile and unpredictable, one thing is clear: the decisions made in Washington will send ripples through supply chains worldwide.

Read Similar…

US Trade Tariffs’ Supply Chain Disaster

Red Sea Disruption Continues to Effect Shipping

Posted on by Will Priestman

The Red Sea shipping crisis has hit headlines again recently, following a series of Houthi attacks on the 163,759-deadweight tonnage M/V Sounion tanker. 

Occurring late in the summer, the attack and subsequent disruption of shipping operations in the Red Sea has the potential to have more of an economic impact across the globe at a time when retailers are doubling down in the run-up to Christmas.

Understanding how much the red sea disruption has already affected shipping 

There was estimated to have been 21,344 ships which crossed the Red Sea during 2023. This works out at around 59 ships using the shipping route each day, with these making up 12 per cent of global trade throughout that year.

However, defence and security think tank the Royal United Services Institute reports that just 905 cargo-carrying vessels sailed in the Red Sea in July 2024 – which is about 30 ships per day.

This is just one startling fact about the impact that the Red Sea tensions has had on the shipping industry. Integrated container logistics and supply chain services specialist Maersk has stated that the crisis has resulted in the following challenges:

  • Cargo travel distances has increased by an average of nine per cent, due to vessels needing to go around Africa via the Cape of Good Hope to avoid the Red Sea route. This has resulted in a rise in transit times, as well as more ships being required to transport the same amount of cargo.
  • Due to increased transit times and additional ships being needed, this has also caused the number of vessels being available to transport cargo to reduce considerably.
  • Another knock-on effect of ships taking a longer route to avoid the Red Sea route is that both carriers and businesses are subjected to increased costs.These costs are to cover the additional time, fuel and resources required to complete an extended journey.

The Insights Unit of the British Chambers of Commerce has also shed light on how the Red Sea disruption has impacted businesses across the UK. According to their research, over 55 per cent of UK exporters believe they’d been impacted by the crisis. More than 53 per cent of business-to-consumer service firms and manufacturers felt the same way.

Firms surveyed pointed out that they’ve noticed increased costs – some have seen rises of 300 per cent for container hire, for example – as well as logistical delays, whereby up to three or four weeks have been added to delivery times.

Andrew Thompson, the Chief Executive Officer of the Cleveland Group & Cleveland Containers, commented on the disruption experienced earlier this year by saying: “It’s difficult to ignore the ongoing impact of the Red Sea crisis on our shipping operations.

“In response to these terrible ongoing attacks, shipping lines are understandably acting on their heightened security concerns and are continuing to reroute as a precautionary measure. We are anticipating a 2-3 week delay in container deliveries into the UK, which creates a knock-on effect for our customers.”

Ways that retailers can reduce delays in the lead up to Christmas

Insights by INVERTO, which is the specialist supply chain management arm of the Boston Consulting Group, has suggested that retailers across the UK have already had to alter their procurement strategies significantly in the lead up to the Christmas trading period.

INVERTO’s Principal Patrick Lepperhoff commented: “The prolonged impact of Red Sea disruptions is having knock-on effects across supply chains. Usually, the summer is a quiet time for shipping and warehousing. However, at present, the shipping industry is remarkably busy, as the complex process of getting shops stocked for the key Christmas period is moved forward by two months.

“This has put pressure on the retailers themselves as they take in more stock early, for which they may not have warehouse space. Instead, retailers will need to seek short-term storage back-up space, which can be very costly.”

Block-space agreements, whereby retailers and carriers can negotiate a price for a fixed weight or volume of cargo in the future, has been recommended by INVERTO to ensure retailers have absolute clarity on available stock and upfront costs.

The company also advises retailers to:

1.      Set up a logistics taskforce, which will work to monitor freight rates and lead times with the aim of optimising costs.

2.      Look into AI solutions, which can analyse real-time rate fluctuations and conditions to identify optimal shipping routes.

3.      Strike up stronger relationships between suppliers and procurement, with the aim of looking into options for nearshoring so that supply chains become more resilient to risks in the future.

Maersk has echoed these recommendations, stating that businesses should invest more in data analytics and build solid partnerships in the supply chain sphere when learning from the Red Sea disruption.

They also advise retailers to look into supply chain diversification, as a business having numerous material suppliers covering various regions can help them to reduce the impact felt on any supply chain disruptions.

Read Similar…

English Channel Supply Chain Delays threaten Christmas

Packfleet and Who Gives A Crap ship over 9m rolls

Posted on by David Priestman

All-electric courier Packfleet and Who Gives A Crap have ended crappy deliveries for Londoners, with over nine million toilet rolls delivered across the capital. 

It’s not just customers that are benefitting, it’s the planet too, with the brand saving approximately 54,500kg of carbon emissions thanks to Packfleet’s ultra-efficient, all-electric fleet.

These figures will only continue to increase, with Packfleet on course to ship over 10 million rolls by the end of 2024.

From working with Packfleet alone, Who Gives A Crap is set to reduce the total carbon emitted by its UK-EU region by 0.6%.

To mark the new partnership, the Who Gives A Crap team recently became Packfleet delivery drivers for the day – bringing ‘random acts of crappiness’ directly to customers’ doorsteps.

Londoners were treated to free cupcakes alongside their toilet roll, with furry friends being offered branded dog biscuits.

As a result of the partnership, Who Gives A Crap has seen a 25% drop in customer queries on the whereabouts of their orders, thanks to the introduction of Packfleet’s transparent, user-friendly recipient experience.

Packfleet’s delivery failure rate is 10x less than traditional couriers, resulting in over 98% of Who Gives A Crap customers receiving their bog roll on time – an over 4% improvement on the UK industry average – cutting down on resource-intensive redeliveries.

The two B Corp certified brands teamed up in October 2023, and have been disrupting their respective sectors together ever since.

Tristan Thomas, CEO of Packfleet, said: “We’ve achieved a lot in the short time Packfleet has been working with Who Gives A Crap, with both customers and the environment seeing the upshot. 

“Our close relationship with the Who Gives A Crap team has allowed us to do some amazing work, including letting them experience what it’s like to be a Packfleet driver first hand. 

“Whilst we can’t promise to deliver toilet rolls directly to the bathroom door, we are confident we can maintain the high standard we’ve achieved and continue to put a stop to crappy deliveries.” 

Phillipa Taylor, Head of European Supply Chain at Who Gives A Crap, added: “We chose to work with Packfleet due to their carbon neutral deliveries, tech platform and customer focus.

“Deliver and Delight is one of our core values at Who Gives A Crap. Packfleet have consistently lived up to this, with reliable and excellent service, week in, week out – driving down our customer tickets. 

“The Packfleet team continually comes to the table with proactive ideas and opportunities on how we can further improve our customer experience. 

“Surprising our customers on delivery day was a real highlight for us. We couldn’t have done this without Packfleet’s trust and cooperation. They have been great to work with and have enabled us to get closer to our customer experience. Thank you, Packfleet.”

Read Similar…

UK Parcel Delivery to Lead Europe This Festive Season

UPS and FedEx Deliverability Rates Drop Significantly

Posted on by Will Priestman

Aggressive discounting by UPS and FedEx during Q3 2024 lowered ground delivery rates to their lowest since 2021, according to the TD Cowen/AFS Freight Index. While this benefits large shippers with reduced costs, it may have implications for service quality and deliverability. Logistics experts caution that as carriers continue to cut prices, maintaining operational efficiency and speed could become a challenge, potentially affecting delivery times, especially for smaller customers who receive fewer discounts and may face delays.

Larger Discounts for Big Shippers

The data revealed that the most significant discounts were granted to high-volume customers, indicating a strategic push by the two delivery giants to lock in large accounts during a period of intense competition. As e-commerce continues to grow and consumer expectations for fast, affordable delivery rise, companies like UPS and FedEx have been forced to find ways to meet demand while protecting their market share. By offering more substantial discounts to larger shippers, they aim to retain key business clients in a highly competitive environment.

Broader Market Implications

This trend has broader implications for the logistics industry. The price war between UPS and FedEx signals a potentially long-term shift in how carriers price their services, particularly as global supply chain pressures and inflationary forces continue to affect operations. Despite cost-saving measures, including automation and logistics infrastructure improvements, the significant rate reductions may challenge carrier profitability if such discounts continue.

The question now is how long these aggressive pricing strategies can persist. While large customers are benefiting, smaller businesses may need to explore alternative options as their savings remain limited. Carriers will need to strike a balance between offering competitive rates and maintaining financial sustainability as the shipping landscape evolves.

Read Similar…

Surge Pricing on Shipping Dampens Profits of Logistics Firms

Hurricane Milton Shakes Global Supply Chains

Posted on by David Priestman

Hurricane Milton has brought significant disruptions to Florida’s logistics networks, affecting everything from port operations to road and rail transportation. With logistics at the heart of global supply chains, the storm has created ripple effects that are likely to be felt across industries for weeks, if not months. Understanding the recovery process from Milton requires looking at the logistical systems in place, how they have responded to past disruptions, and what steps are necessary for a full recovery.

Port Closures and Supply Chain Disruptions

Florida’s ports are critical nodes in the global logistics network, particularly for imports of petroleum, construction materials, and consumer goods. Hurricane Milton forced the closure of key ports like Tampa Bay, Jacksonville, and Manatee, halting the flow of essential goods. This has led to immediate shortages, particularly in fuel, and delays in construction projects as materials like steel and cement are stuck offshore or rerouted through less efficient ports.

Port closures are especially disruptive to logistics because they act as choke points in supply chains. When one or several ports shut down, the entire flow of goods is interrupted. In this case, goods bound for the southeastern U.S. and even broader markets across the country are facing significant delays. The global shipping industry, already under strain from other disruptions, now faces rerouting challenges and extended lead times as ports in Georgia, South Carolina, and Alabama handle diverted shipments.

While smaller ports like Port Miami and Port Everglades are expected to resume normal operations within 1-2 weeks, larger ports like Tampa Bay may take 4-6 weeks to fully reopen for large cargo ships. This timeline is consistent with past recoveries, such as after Hurricane Irma, when it took weeks for normal port activity to resume.

Fuel Supply Chain Issues

Logistics within the fuel industry has been particularly affected by Hurricane Milton. With Florida ports closed to large tankers, the distribution of fuel to gas stations and other consumers has been delayed. This creates a bottleneck not only for the energy sector but also for road transportation, which depends on fuel for trucks to deliver goods across the region.

Restoring the fuel supply chain is critical for the broader logistics sector. Without fuel, trucking companies cannot meet delivery schedules, and supply chains for essential goods like food, medicine, and consumer products face even greater delays. Past hurricanes, such as Hurricane Michael and Hurricane Harvey, showed that fuel shortages can persist for weeks after the storm passes, especially when large ports remain closed.

Given that many gas stations are already running low on supplies, it is expected that fuel distribution will gradually improve over the next 2-3 weeks. However, full restoration of the fuel supply chain may take up to six weeks, as the largest tankers are only allowed to dock once safety inspections and infrastructure repairs are completed at major ports.

Transportation and Inland Logistics Challenges

The inland transportation network—comprising highways, railroads, and distribution hubs—is facing significant disruptions due to Hurricane Milton. Flooded roads and damaged rail lines have created delays in moving goods from ports to warehouses, factories, and retail locations. Trucking companies are reporting major delays, with some routes completely blocked due to flooding, which mirrors the disruptions seen after past storms like Hurricane Florence.

Road Flooding

Logistics companies are responding by rerouting shipments to neighboring states or by using alternate transportation modes, but this comes with increased costs and longer delivery times. The rail network, crucial for moving bulk goods like steel, chemicals, and agricultural products, is also facing delays as assessments of track damage are carried out.

The recovery of Florida’s transportation network is expected to follow a staged approach. Road repairs and rail line assessments are already underway, but it could take 2-4 weeks for most major routes to reopen. Full restoration, particularly for more remote or heavily damaged areas, could take up to 6 weeks.

Global Supply Chain Disruptions

Florida’s ports are integral to global trade, particularly in connecting the U.S. with Latin America and parts of Asia. The closure of these ports due to Hurricane Milton has already created significant delays in the global supply chain. Companies that rely on just-in-time delivery of goods, such as retailers and manufacturers, are particularly vulnerable to these delays, which are expected to ripple through the global supply chain for up to three months.

International companies are rerouting shipments to other ports along the Gulf and East coasts, but this is straining those ports’ capacities and leading to higher costs for freight handling. The automotive, electronics, and consumer goods industries, which depend on the seamless flow of components and finished products, are likely to experience delays in both production and distribution. Similar supply chain disruptions were seen after Hurricane Katrina, when global supply chains took months to fully recover from the impact on Gulf Coast ports.

Shipping off track to meet 5% Zero-emission Fuel Target

Posted on by David Priestman

The global shipping industry is not on track to meet its target of having zero-emission fuels account for 5% of all fuels by 2030. That’s according to a new report from the UCL Energy Institute, UN Climate Change High-Level Champions, and the Getting to Zero Coalition (a Global Maritime Forum initiative), which they hope will act as a “serious wake-up call” to the industry.

The third annual progress report, ‘Progress Towards Shipping’s 2030 Breakthrough’, warns that the majority of actors across the maritime ecosystem – which spans the five ‘system change levers’ of supply, demand, policy, finance, and civil society – are moving too slowly to meet the internationally-agreed target, with the next 12 months being critical to avoid shipping falling irreparably behind its climate goals.

Global shipping is responsible for around 3% of the world’s greenhouse gas (GHG) emissions – more than Germany – so it is a crucial sector to decarbonise. With global trade predicted to quadruple by 2050, emissions will skyrocket without urgent action. The International Maritime Organization (IMO) set a goal of ensuring that zero- or near-zero emission fuels make up 5% to 10% of all shipping fuels by 2030. The 5% target is considered the critical mass at which the infrastructure, supply chains, and technology that support zero-emission fuels mature and enable exponential growth. This means if the 5% target is not achieved, it could jeopardise the industry’s entire 2050 net-zero goal.

According to the report, production of scalable zero-emissions fuel (SZEF) currently in the pipeline could, under the more conservative scenario, end up covering less than half of the fuel needed to hit the 2030 target, while the current order book of SZEF-capable vessels would only deliver around 25% of required SZEF demand by the same year. Finance for SZEF is also now ‘off track’ – a downgrade from 2023 – due to a slowdown in funding towards SZEF-related activities and more funding going towards fossil-fuelled vessels.

“The speed at which the shipping industry adopts hydrogen-derived fuels will shape the success and the cost of this transition for decades to come,” said Dr. Domagoi Baresic, Research Fellow at the UCL Energy Institute. “Extensive adoption of such fuels by 2030 remains within reach but will require significant and immediate action by policymakers, fuel suppliers, and the shipping industry over the next 12 months. Without such action, the transition will be much longer, costlier and have a less positive environmental impact. All the ingredients for a rapid adoption already exist, but it is up to the relevant actors to make it a reality.”

Of the 35 actions required to deliver the 2030 breakthrough, just eight are considered ‘on track’, while 13 have been classed as ‘off track’ – up from eight in last year’s edition of the report. The remaining 14 are only ‘partially on track’. However, the report also stresses that meeting the goal is still achievable if action is stepped up. It points to strong progress on actions within in the ‘policy’ and ‘supply’ system change levers as examples of success, with hopes that strong GHG pricing and the fast delivery of announced production projects respectively could put both ‘on track’.

Jesse Fahnestock, Director of Decarbonisation at the Global Maritime Forum, said: “Increasing the use of zero-emission fuels is at the heart of decarbonising the shipping industry, but we are not seeing the progress required to meet our decarbonisation goals. There is no time to waste, and we must see a big shift in momentum over the next 12 months to bring our 2030 targets within reach. With such long lead times to implement policy, and finance and build vessels and energy supply chains, the window of opportunity is only open by a crack – but importantly, it is still open. This report must act as a serious wake-up call to the industry to accelerate the transformation we need to see in the sector.”

The report identifies five key ‘system change levers’ for the industry and tracks their progress towards enabling the 5% goal. These include:

• Supply (partially on track): Current SZEF production in the pipeline could cover less than half (43%) of the fuel needed by 2030 in the report’s more conservative scenario. However, there has been a significant increase in announced projects and if more come to fruition, zero-emission fuel production could surpass what is needed for the 5% target, even surpassing 10% in the most optimistic scenario.
• Demand (off track): Unless progress significantly ramps up, the current order book of SZEF-capable vessels will only deliver around 25% of the SZEF demand needed to achieve the 2030 target. However, as supply ramps up and more SZEF-ready engine options come to market, demand should grow exponentially, bringing the target within reach. Given long lead times on new vessels, urgent action is needed to bring demand back on track.
• Finance (off track): A slowdown in funding for SZEF-related activities and vessels, combined with more funding going towards conventional fossil-fuelled tonnage, means finance is now off track against the 2030 goal – a downgrade from 2023 when it was ‘partially on track’. Increases in public finance could help correct the reduction in private funding.
• Policy (partially on track): Progress has been positive at a global policy level following the 2023 IMO Strategy on Reduction of GHG Emissions from Ships. It is critical that upcoming negotiations on GHG pricing result in ambitious policies to send strong SZEF signals and push policy on track. At the national level, progress is slower, and more action is needed to develop support mechanisms for SZEF bunkering and vessel developments.
• Civil society (partially on track): The maritime industry has made good progress in improving the visibility of multiple issues that will help ensure a just and equitable transition, such as gender imbalance, lack of adequate seafarer training, and a lack of diverse voices in the fuel transition discussion. However, this now needs to translate into concrete actions leading to change.

H.E. Razan Al Mubarak, UN Climate Change High-Level Champion, said: “Limiting climate change to 1.5°C will not be possible without shipping playing its part. To align with a 1.5oC transition, the sector must intensify its efforts in a short timeframe. We hope that the findings in this report provide a practical, detailed roadmap for action to accelerate this transition and ensure it is just, benefiting workers and communities globally.”

similar news

Zero-Emission, All-Electric Home Deliveries

 

Subscribe

Get notified about New Episodes of our Podcast, New Magazine Issues and stay updated with our Weekly Newsletter.