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Your brief for the week ahead
Mon 13th August 

1. China backing LNG as a marine fuel could be a tipping point

China's Ministry of Transportation wants to expand the country's LNG infrastructure so that more ships shift from using heavy fuel oil to liquefied natural gas.

The plans are pending reviews and inevitably the rhetoric and ambition may not materialise in their entirety, but this is an important statement of intent from China to develop LNG-fuelled transport with a tangible timeline (2025), the promise of infrastructure investment and backing across the state system.

The fact that this move comes despite Beijing’s threat earlier this month to impose a 25% tariff on US LNG imports, as part of the retaliation against Washington’s trade policy, only highlights how determined China is to push it through. The fact that central government is talking about offering financial support for the development of LNG-powered vessels and other equipment highlights how significant an opportunity this might just prove to be for the market.

Read more on Lloyd's List.
China to back LNG as a marine fuel

2.The Smart money is on finding value

The most successful companies are adapting to find ways of using data that informs shrewder decision making. Efficiency is the goal, but the smart money is on finding value beyond cost savings.

We are taking it as read that the next generation of ships will be super-connected assets, where systems are monitored in real time and predictive analytics will allow companies to forecast spend, react to changes ahead of time and plan strategically for likely scenarios. But with greater data-led insights and more sophisticated tools, the traditional role of procurement in marine businesses is also evolving.

Suppliers are rapidly becoming partners in a process that helps businesses improve quality control, transform reliability, improve productivity and cut costs.

Understanding the complexities of compliance costs, reacting to rapidly changing regulatory requirements and managing legal risk is increasingly a process of collaboration with trusted expert partners rather than a traditional in-house affair.

The acid test for any smart shipping investment is whether it can deliver lower unit costs, or add value by providing better service for the same price. But for companies to effectively address the issues of efficiency, safety and personnel management which they face today, cost is secondary to value and sustainability.


3. A party for one ain’t no fun. Collaboration is key

IBM and Maersk have made much of the partnership they have formed to promote blockchain as an open solution to solve many of the problems in the logistics supply chain. And they deserve credit for making the effort with the launch of TradeLens.

There are many areas of documentation, reporting and recording of transactions, bills of lading, hazardous goods and customs clearance in which blockchain is a technology whose time has come. Global trade could be made more efficient by the effective use of blockchain-based technology.

They have also done well to bring on more than 90 partners as early adopters in their programme trial. But the lack of other carriers in TradeLens, other than PIL, means that despite its efforts to pull together an industry consensus and set a global standard, this could end up being used only by Maersk and its customers. And those customers — the ports, terminals, BCOs and freight forwarders — will have to have separate systems for other carriers’ efforts to do the same thing.

Our containers editor James Baker makes an excellent case for the container sector needing a blockchain, not a series of blockchains. But there is a wider point here. Integration of technology and more multi-disciplinary teams is a critical balancing act for all stakeholders in the industry right now, but the biggest challenge will be in changing the industry’s mindset.

Read more on Lloyd's List:
Maersk and IBM launch blockchain product
A party for one ain't no fun
Collaboration is key to the class challenge


4. Things can only get better, apparently

“Trading conditions improved in the second quarter and the positive trend is likely to continue through this year” is fast becoming a stock phrase being trotted out in the current round of financial reports. Making trend predictions off the back of unrelated and often very company specific financials is a dangerous game, but it does at least seem clear that some positivity is starting to shine through in the market.

Although macro-economic and political uncertainties are currently combining to present what is being euphemistically referred to as “an unsettled global trading environment”, the shipping industry is seeing the return of more positive fundamentals that should ultimately generate increased activity and higher freight rates.

Well, that was the view from Clarksons, the industry’s biggest brokerage, reporting this week.

The other stand-out trend, however, has been the eye-watering increase in bunker costs being reported. Container lines in particularly have unanimously been reporting that average fuel prices have jumped by about 25% in the first half of this year. Given that the average freight rate dropped by about 10% in container shipping in the first six months as a large amount of new tonnage hit the water, that explains the recent spate of profit warnings.

But fear not, there seems to be a general consensus brewing that the disappointing development several container carriers are facing is simply a delay of the recovery that is bound to emerge.

For a more sceptical reading of the current issues facing box lines, we would direct you to the current edition of the Lloyd’s List podcast where we dedicate the first half to containers. Worth a listen, in our humble opinion.

Read more on Lloyd's List:
Claksons sees profits drop 18%

Listen to to the Lloyd's List Podcast: How to make money in boxes and how to avoid Iran sanctions risk.

5. Everything you wanted to know about the EU blocking statute, but were afraid to ask

Speaking of the podcast, the second half of this week’s edition is dedicated to the potential legal confusion surrounding the so-called EU blocking statute.

There is significant industry concern brewing around this topic, not least from the P&I Clubs, (who are considering applying for exemption from new European rules, worried over potential liabilities arising from compliance with US sanctions, and the law firms seeking to advise their clients.

Our podcast chat this week was with Jeremy Robinson and Lindsey Keeble, partners at the law firm Watson Farley & Williams, who talked us through the risks that shipping needs to be aware of in light of the latest developments. We would humbly suggest it is worth a listen if you are in any way as confused as we were before talking to them.

And don’t forget, you can now subscribe to the Lloyd’s List Podcast via iTunes and most other podcast providers. And make sure you are registered for a free account on so you can receive our invaluable Daily Briefing e-mail. We welcome your feedback and story suggestions for the podcast, so let us know what you think by emailing

Read more on Lloyd's List: 
P&I clubs may seek exemption from EU blocking statute.


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