March 23, 2021

Influence of Ocean Freight Logistics on Ocean Environment

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Shipping industry manages approximately 80% of global trade, transporting the containers with solid and liquid bulk cargo across the oceans annually. As demand for ocean freight increases, the volumes will triple by 2050.

2020 was a chaotic year for ocean freight logistics. In fact, due to the globalized disruptions in the transportation sector, the annual cargo capacity decreased due to the pandemic. A new environment for international trade has created multiple safety transportation options.

Ocean freight is a cheaper solution for transportation of large consignments of goods (when compared to air-freight costs), and a more carbon-efficient one. However, delivery times are not the quickest, because the delays can occur at the customs of the ports.

Coreteka decided to dive into the topic of ocean freight logistics after we have covered the air freight forwarding industry in one of our previous articles.

Outlines of ocean freight logistics

Suppliers and ship owners, intermediaries (agents, brokers, freight forwarders), customers (charterers, shippers), port authorities, customs and insurance organizations are participants of ocean freight logistics.

There are a wide variety of vessels, which can transport even the dangerous and hazardous goods that are forbidden in other shipping services. A shipping company collects the goods from a supplier, and a broad range of products is packed and loaded onto a vessel. The main port operations are warehousing, packaging, loading the ships and preparation of cargoes for final destinations.

Most of the cargo is shipped via container vessels. A typical cargo ship can carry around 18,000 containers, which means that ocean freight is economically and environmentally superior to other forms of delivery service over large distances.

Some of the common ships used in ocean freight logistics:

  • General Cargo Carriers;
  • Dry Bulk Carriers;
  • Container Carriers;
  • Oil Tankers;
  • Gas Carriers;
  • Chemical Tankers;
  • Offshore Vessels;
  • Roll-on/roll-off ships.

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Thousands of containers are managed every year for import and export issues from Asia to Europe and North America, and vice versa. There are a number of factors to consider when planning the shipments:

  • Origin and destination of products;
  • Type of container and size (dry storage, flat rack, refrigerated, tank, insulated or thermal, etc.);
  • Transit time;
  • Cargo dimensions and Incoterms rules;
  • Local customs regulations (customs brokerage).

Threats to ocean environment

Accidents from work of ocean freight make a large impact on nature and the ocean environment. A cargo ship might leak its own fuel. A ship’s tank might leak dangerous chemicals such as crude oil. The number of ships, carrying hazardous and harmful substances, is growing steadily.

Global warming little by little impacts our natural ecosystems. The cause is greenhouse gases evaporation. Burning of fuel generates about 90 percent of all sulfur oxide and dioxide emissions globally. Heavy fuel oil is a highly viscous liquid with high content of sulfur.

Consumption of unpurified fuels has made maritime transport the worst producer of sulphur emissions. Consequently, ocean freight participants began to turn to liquefied natural gas (LNG) or biofuel to reduce impact on the ocean environment. But the cost of equipment for that is still prohibitive.

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Ships continue to be large producers of carbon dioxide exhaust emissions (CO2), sulphur dioxide (SOx and SO2), nitrogen oxides (NO2 and NO3) and particulates. Sulfur emissions can cause harmful side effects on land — acid rain, smog, crop failures, and many respiratory illnesses such as lung cancer and asthma.

Other pollutants such as wastes, garbage, lubricants etc. are associated with ocean freight logistics. Garbage creates vast garbage spots such as the Great Pacific Garbage Patch. The vast majority of plastics are made of hard polyethylene or polypropylene. Plastic pollution is a serious environmental concern.

Invented ideas to decrease ocean pollution

Top ocean freight companies should prepare to take ocean environment policies seriously. Underwater drones, for example, are being deployed to explore underwater boundaries. Concept of strong “green ports” has become more familiar to freight forwarders only in recent years, as it is recognized that ports need to minimize emissions. Some major hub ports in Europe and America have already adopted their own “green port” strategies.

The International Maritime Organisation (IMO) wants to diminish greenhouse gas emissions by at least 50 percent by 2050 and limit the sulphur content of a ship’s fuel to 0,5 percent. It has developed a relationship between consumed fuel amount by the ship and amount of cargo transported. The organization forces shipowners to install new equipment by 2024. Additionally, sulphur emissions can be decreased by connecting ships to the electrical grid during their stay at ports (shore-side electricity).

Slower travel may reduce expenses, for example, large ships might burn 280-300 metric tons of high-sulfur fuel oil a day at high speeds, but only 80-90 metric tons a day at slower speeds. By increas­ing the ship’s size, it is possible to decrease energy consumption per unit of cargo.

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Marine Environment Protection Committee (MEPC) that addresses ocean environmental issues under IMO’s remit, entrusted at the end of 2020 to reduce shipping carbon emissions by 40% by 2030. That will cost the shipping companies an extra 50 billion dollars annually.

Some ship operators are investing large sums in converting vessels to alternative fuels — cleaner ships with new engines, port facilities and scrapping of dirty ships. It is assumed that 15% of ships will install scrubber systems to capture sulfur and particulate emissions within the next few years. Bloomberg NEF, a strategic research provider, estimates that approximately 4,800 vessels will be scrubber-equipped by 2025.

Existing solutions of ocean freight shipping companies

Let’s look at the experience of ocean freight companies in reduction of ocean pollution. Kuehne+Nagel strives to have a positive influence on the ocean environment with Net Zero Carbon initiative for carbon neutrality by 2030. DHL Global Forwarding is committed to offer environmentally friendly supply chain solutions to neutralize the carbon emissions of their LCL loads from January 2021 by using biofuels.

To minimize the impact of ocean freight logistics on the ocean environment, some scientists think that remote-controlled ships may fill a gap across short trips. Demand for autonomous ships has increased in the Asia Pacific region. According to a report, issued by MarketsandMarkets, the autonomous ship market was worth 5.8billion dollars in 2020.

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In November 2020, the Second International Ship Autonomy and Sustainability Summit with Maritime Autonomous Surface Ship organization (MASS) have made significant progress in manufacture and operation of autonomous vessels.

Norwegian-based company ASKO Maritime AS has a project to construct two Roll-on vessels with autonomous technology for zero emission and uncrewed operations. Another Norwegian container ship, Yara Birkeland, is scheduled for fully autonomous operation by 2022. These are just two examples of ocean freight logistics development in that way.

How to reduce environmental impact? Find out more about in the article.

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Control and prevention of ocean pollution (oils, chemicals, garbage, air pollutants and greenhouse gas emissions) was a topic of our article. All ships collectively produce 2 percent of the world’s carbon emissions, 13 percent of sulphur emissions, and 15 percent of nitrogen oxides.

In order to develop the customized solutions, Coreteka is exploring updates in the ocean freight logistics sphere. We have tried to give you initial data and familiarize with the concepts and organizations that are striving to improve the ocean environment.

Contact Coreteka for more information.