While we undertake the Herculean task of fighting and recovering from the consequences of COVID-19, we can use the pandemic as a wake-up call that helps us not only rebuild the way in which we work, but also redesign it better and stronger.
There is no denying that this unprecedented crisis has been leaving a mark on businesses worldwide, with shipping likely being more affected than any other industry. In the midst of the turmoil, shipping companies and maritime suppliers that are highly reliant on global supply chains have witnessed how the pandemic slowly revealed their fragile nature.
According to Donald Eubank, cofounder of Read the Air, companies with mature sustainability programmes have seemed to fare better during the pandemic, as their regular social, environmental and economic due diligence meant they have been able to rely on a stronger, more transparent and resilient supply chain, and swiftly step up to protect their employees. The majority of companies, however, have had to try to adapt and change their behaviour quickly in order to weather the crisis, oftentimes to no avail.
While for the moment this continues to be a trying time, we will undoubtedly emerge from this, and it is important to remember that in every crisis lies an opportunity… and the pandemic has not failed to highlight so far both potential and opportunity in shipping.
1) Collaboration, collaboration, collaboration
In a case study on the IMPA ACT programme written back in 2018, Henning Andersen, Head of Purchase at Danish shipowner J. Lauritzen, said that change, notably social change, is best done collectively, that is through collaboration. This has never been more true than it is today, where collaboration does not just power change, but helps us weather the instability and danger brought about by the pandemic more quickly.
Whether large- or small-scale, cross-sectoral or multi-stakeholder, national, regional or global, competitive collaboration and partnerships are key to thriving and surviving. Fully tackling this crisis does indeed need competitive collaboration at a very grand scale, including governments, civil society, industry and investors, but smaller and more practical initiatives can still be part of the solution. Take, for instance, the partnership established between one of the largest maritime insurers Gard and the Norwegian Centre for Maritime and Diving Medicine (NCMDM) in the immediate aftermath of the pandemic start, with the former sponsoring the development of an online web-based tool that helps manage COVID-19 cases onboard vessels and helps protect the health of seafarers internationally. Or take the partnerships established every week through IMPA ACT, which help both shipowners and maritime suppliers work together to manage their supply chain responsibly and take action when adverse operational impacts are identified across their chain of suppliers, hence rendering these more transparent and resilient in times of crisis.
Yes, COVID-19 has put all companies under immense pressure, but it is in times like these when we realise how important collaboration is to not only ease the consequences in our industry, but also enable further opportunities. Let us not forget that it was a multi-stakeholder collaboration between oil companies, shipowners, classification societies, governments, finance institutions and international organisations that has reduced the quantity of oil spilled from tankers on a ten-year average by 97% in the last four decades.
It may be true that COVID-19 has brought about unanticipated costs, but it has also underlined the considerable potential with regard to technological advancement and innovation, as a way to increase resilience and support sustainability, explains Thomas Peacock, Professor of Mechanical Engineering at the Massachusetts Institute of Technology, to the audience at the UN Global Compact Virtual Leaders’ Summit. We know there are substantial discrepancies between ports at global level, with many that still rely on paper-based processing, and we have seen these disruptions negatively impact the entire supply chain; “electronic port-ship interaction, remote monitoring systems for vessels, etc., can enable increasingly optimal and safer port calls”.
We have also been able to identify the pressing need to set up new norms for data sharing between industry and science, as a major part of ocean data is currently being siloed; “an overarching data programme” resulting from collaboration and partnerships, with data being made available without restrictions for commercial purposes would be an immense help. We also need to be addressing the many discrepancies that still exist when it comes to capabilities at regional and international level in cross-sectors, with capacity building, information sharing and assisted data innovation being the key.
Finally, in an increasingly digitalised world, pushed even more into the virtual space by the pandemic, the Marine Stores Guide Data Licence, for instance, has been monumental in breaking the language barriers between sea and shore, and streamlining work that allows much of the global trade to continue; we at IMPA also see an opportunity to improve and further shape the MSG, so that it keeps up with the changing environment.
3) Not losing sight of what else is important: opportunity and dialogue
We need not forget that without a healthy ocean, we cannot have a healthy planet, and the pandemic has only been “a small overture to what climate can bring”, says Inger Anderson, Executive Director of the UN Environment Programme. We at IMPA saw how companies and governments have been facing difficult financial decisions while trying to recover from the pandemic and could foresee how a global economic slowdown will go hand in hand with a reduction in corporations’ and governments’ commitment to climate action, and we wanted to do our part in not allowing this. This was especially at a time when the pandemic itself has called out the fragile nature of our industry’s progress when it comes to the sustainable development goals. This is why we built IMPA SAVE, as a result of our team not losing sight of the pressing issue that remains climate change, and bringing together major stakeholders working in the shipping sector to create powerful dialogue that reverberates across the industry and, in the words of John Beck, Vice President Procurement at Wilhelmsen Ship Management, “can change hearts and minds”.
4) The ocean: vital to our survival
With SAVE, we tell everyone that the health of our ocean and that of our industry are interlinked. In fact, it appears that the health of our ocean and that of ourselves are interlinked as well. Robert Blasiak, Researcher at the Stockholm Resilience Centre, has recently talked during the UN Global Compact Virtual Leaders’ Summit about the ocean and its fascination at genetic level. Not only are there around two million species in the ocean, but 90% of them remain undescribed even today. What is more, the success rate for drug discovery from marine natural products is 3.5 times higher than the rate of terrestrial ones. A case in point is that so far, the one compound that has now been approved for use in severe cases of coronavirus is from a category of drugs directly derived from marine sponge nucleosides, Blasiak says.
The ocean in itself is a vastly unexplored opportunity, and with the right networks, collaboration and investments in ocean science in place, we will be able to explore many of these opportunities in the years to come.
5) Disclosure and transparency
Ocean operations are vital to providing energy, medicine, food and so on, and shipping is moving more than 90% of all international trade. Massive logistical challenges have been created when the pandemic struck and travelling was curtailed and the borders were closed. In the midst of chaos, companies without the right tools in the sustainability bag and without deeply-embedded policies, due diligence and remediation systems, had little to no visibility into their operational impacts, which meant they would be slower to respond and less effective overall in weathering the crisis. Programmes like IMPA ACT are increasingly becoming more and more important, and a good starting point for those companies in shipping who wish to understand more about responsible purchasing practices, structural dialogue with suppliers and transparency. And with the European Commission having proposed new rules on mandatory human rights and environmental due diligence in EU companies’ global supply chain, this might not be an option from 2021 onwards. In the end, whether responsible business conduct remains optional or not, it is an opportunity which, once taken, increases resilience and makes companies stronger and better equipped to deal with crises such as COVID-19.