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Norshipping Conference: "Next Generation Shipping"

June 4, 2013

Norshipping Conference: "Next Generation Shipping"
Opening address by Koji Sekimizu
Secretary-General, International Maritime Organization
Oslo, Norway, 4 June 2013
 
Your Royal Highness, Minister, Excellencies, Ladies and gentlemen,
 
It is a great pleasure for me to be here today, and to see so many important and influential figures from the shipping world gathered in this Conference to debate and discuss industry's future.
 
“Next generation shipping” is the theme of this year's conference and, personally, I found it both challenging and inspiring.
 
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The world is changing and at we are at a crossroads.  We are standing at a tipping point.

The United Nations is considering the future of the world community.
 
The world economy is still in a challenging period in the wake of the unprecedented financial crisis and contraction over the last years.
 
New players in the global economy are emerging in the developing world.  With globalization, we are moving towards a more inter-dependent society.
 
Millennium Development Goals have been set for 2015.  We are struggling to achieve the goals set in the less than 1000 days remaining before the end of 2015.  Poverty eradication, human rights and greater social and gender equality; they are still our targets.  Geopolitics is still our concern.  We have fewer than 1,000 days until the MDG agenda reaches its target date.  If we accelerate our efforts in that remaining period, we can still improve the lives of millions of people and add momentum as we move toward the post-2015 agenda.
 
In addition, through the Rio+20 Conference in 2012, world leaders expressed their determination to get the future we want and sustainable development goals.  On climate change, the world is still struggling to develop a new workable global framework to mitigate the effects of GHG emissions.  Climate change is real, and despite the state of developments on regulatory framework, progress is being made through civil society and innovators. The shipping industry is no exception.
 
The shipping industry has a solid track record in environmental protection.  Over the past forty years, the shipping industry has made significant progress in environmental protection, and international cooperation through IMO has been the key component in this successful move forward in ensuring global environmental regulation of a truly global industry.  Load on top, segregated ballast tanks, clean ballast tanks, crude oil washing, double hull, discharge control for chemicals, sewages and garbage, liability limitation and compensation schemes, measures for particularly sensitive sea area, ballast water management, prohibition of harmful anti-fouling paints, and emission control measures are just some of the developments.
 
Shipping, through IMO, has a truly impressive record of excellent and meaningful initiatives.  The shipping industry has been at the forefront of the developments in pollution prevention and protection of marine environment. We must be proud of this.
 
And now, shipping is looking for ways to increase energy efficiency in its operation and promoting new technology and innovation.  The shipping industry is taking a lead towards an energy efficient society.
 
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Shipping is still in the adjustment period. After the extremely profitable period of the last decade and global economic contraction, the huge amount on the order book and steady delivery of new tonnage and shrunken transport demand has created a gap:  A gap between supply and demand.
 
Shipping is a cyclical industry and we have seen the similar state of affairs in 1970s when the world encountered the oil crises in 1973 and 1978.  In order to overcome the over tonnage, measures applied in the industry were ship lay-up, slow steaming, and eventually ship scrapping.  More than three decades later, we have encountered the same situation.

Unless the global economy reverts to a period of significant growth, the gap cannot be resolved without the similar measures you applied in late 1970s and 1980s.
 
But I see a different element between the two.  The difference now from the 1980s is the increased environmental concern and tightened regulations.  We have demand for clean air, biodiversity and mitigation of CO2 emissions.  To deal with those demands for the environment, we have adopted sulphur regulations, the Ballast Water Management Convention and EEDI and SEEMP, to mention a few.  Those environmental regulations will have a major impact on the adjustment process to get out of the slump and revive profits.  Environmental regulations would be a driver for a new generation of ships.  This would expel inefficient existing ships and restore a sound balance between supply and demand.
 
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Then what is “next generation shipping”?
 
It is not my ambition to define “next generation shipping”.  It is your task to develop the next generation of ships and shipping. Not mine!
 
But I would like to share with you some of my views over the next generation and the future of the shipping industry.
 
This year's theme of IMO’s World Maritime Day is “Sustainable development: IMO's contribution beyond Rio+20”.  Under this theme, we at IMO are creating a clear concept of sustainable maritime transportation system together with industry partners. 
 
At IMO, a new concept of sustainability of the industry is emerging.  We want to create a solid concept highlighting the importance of shipping and the maritime transportation system as an indispensable component for future growth and sustainable development.  In the maritime transport system as a whole, I think it is natural to see more economy of scale. I predict that shipping will be considered more as an extension of the delivery system for products.
 
On individual ships, I predict that environmental performance will be further pursued.  Beyond compliance with the ballast water, sulphur and energy efficiency regulations, I predict more alternative fuels such as LNG and biofuels would be used for shipping.
 
On the port side, development of supply terminals for LNG as fuel must be accelerated while low sulphur fuels must be supplied at competitive terms.
 
On energy supply front, shale gas in the United States and pre-salt oil reserves in the “Blue Amazon” will change the global energy transport pattern.
 
The expanded Panama Canal and Northern Shipping Route will provide new opportunities.
 
And on regulation, I predict that IMO will continue to act as the only global regulator for shipping and stick to the principle of global standards.  I also predict that IMO will offer the only forum to discuss policy coordination on maritime issues and maritime development.
 
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Ladies and gentlemen,
 
We are clearly facing new challenges.  To navigate through challenging waters ahead, we need a pioneering spirit and I am sure that the shipping industry will explore “next generation shipping” with the spirit of great pioneers.
Thank you.

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