Interview with BIMCO's Sabrina Chao

Published: 01 June 2023

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The BIMCO president refers to the main topics the Round Table focuses on and shares her views on how the shipping industry can improve its public image. Ms Chao also discusses the BIMCO CII clause and the initiatives shipping should undertake to reskill/upscale young talent.

Seafarers and their skills are crucial for the future of shipping

Sabrina Ciao, in discussion with Giannis Theodoropoulos

The Chairs of the Round Table met recently in Athens for the first physical meeting since 2019. What were the main topics discussed?

When the chairs of the Round Table met in Athens in February, the first physical meeting since 2019 due to the pandemic, we discussed and agreed to work together to prioritise seafarers. We unanimously agreed to emphasise the importance of a seafaring community to prevent the criminalisation of seafarers, learn lessons from the pandemic, and improve the attractiveness of seafaring careers to ensure the future availability of skilled mariners. Seafarers and their skills are crucial for the future of shipping and for a successful transition as we work towards decarbonisation.

In addition, we debated members' positions on key industry topics, ranging from decarbonisation and ship recycling to eliminating marine pollution. As Round Table participants, we believe it is crucial that we work together on issues where a combined effort can achieve more than individual efforts. Other current issues requiring member coordination include piracy, MARP,OL Annex VI, greenhouse, gas emissions from ships, reception facilities, ballast water management, corruption and more.

How can the shipping industry improve its public image?

I believe we can increase our collective efforts to inform the world outside of shipping about the all the initiatives and work being done to decarbonise our industry. While some corners of the industry are already raising awareness, there is potential for more to be done. Some industries are further ahead when it comes to communicating their progress, whilst we still have a major task ahead of us to show the rest of the world what we are doing.

We must continue to remind and inform policymakers, the public, consumers, and financiers of the crucial role that should be in place in all our lives. This key message has still not landed consistently everywhere.

We saw examples of this during the pandemic when seafarers were not granted key workers status by many countries. We are responsible for transporting about 90% of world trade. Doing this in an increasingly sustainable manner is crucial, and informing the world outside shipping about it is very important.

At BIMCO, we have now launched three films: "Ships Make the World Go", "Seafarers Deserve Support" and "No Turning Back" with the aim of raising awareness about the industry and the challenges we face.

Much is being done on the digitalisation agenda: driving efficiency and improving operations are important examples of the currently available ready-to-go solutions that can help our GHG missions without delay. The Blue Visby Solution, which BIMCO supports, challenging the “sail fast then wait” approach and moving towards Just-In-Time arrivals, are prime examples of solutions we as an industry can adopt and support right now. Such initiatives also demonstrate to the world outside of shipping that we are committed to reducing our carbon footprint and taking already important steps towards decarbonising.

Charterers have openly expressed their opposition to the ΒΙΜCO CII clause. What are your thoughts on that? How has the clause impacted the business relations between ship owners and charterers?

When we published the CII Operations Clause for Time Charter Parties at the end of last year, the regulation had yet to come into force. The clause serves as a starting point for negotiations for owners and charters who have different roles but must nonetheless share the task of reducing our industry’s carbon emissions. This task requires both parties to be committed and collaborate, and I believe both parties are working to do that. As with all new regulations, the industry needs some time to adapt, and the CII regulation is particularly challenging as many questions still need addressing.

Our industry will no doubt be facing more regulations from the IMO and the EU, and the need for new contracts and clauses will continue to develop along with it. We will therefore continue to develop new contracts as the industry’s needs change and to review and update existing contracts.

What initiatives should the shipping industry undertake for the reskilling/upskilling of young talent as the industry moves onward towards a greener and more digital era?

Our industry is facing increased demand for the diverse skills needed for a more sustainable and digitally-connected future. Challenges include updating skills in areas such as alternative fuels and propulsion systems, circularity, leadership, a safe working environment, and seafarer welfare.

The Seafarer Workforce Report published by BIMCO and the ICS in July last year warned that we must significantly increase training and recruitment levels if we are to avoid severe shortages in the total supply of officers by 2026. The report indicated that demand for seafarers in 2021 had outpaced supply and predicted a need for an additional 89,510 officers by 2026 to operate the world merchant fleet. It is crucial that we find solutions now, together with governments of seafaring nations.

There is a decline in the number of young people aiming for a career at sea, spending many months away from their families. Companies could look at options offering shorter contract periods for younger seafarers, better digital connectivity, and better access to shore leaves, which would be in cooperation with port authorities. In addition, training could be further developed to be more “hands-on” and include the latest technologies, such as simulators and Virtual Reality, although such technologies cannot directly replace time at sea and hands-on experience on board ships.
Lastly, we must ensure that all cadets who begin training complete the program. Companies could increasingly consider having dedicated training ships or allocating space on their fleets’ ships, when available, to cadets supervised by a dedicated cadet training officer.

Meanwhile, it is important not to forget challenges on the shore side where more IT specialists will be needed to manage the increasing number of digital systems, equipment, and big-data analysis within all areas, including technical, operations, commercial, HR, and marketing.

The need for ship recycling will rise in the coming years. What is BIMCO’s view on ship recycling and why?

Ship recycling is one of the topics that is very high on the agenda at BIMCO. In October last year, a report commissioned by BIMCO showed that whilst the EU list of approved ship recycling facilities continues to grow, new additions have not added significant capacity to meet the demands of the global shipping industry.

We, therefore, believe that the focus must shift towards adding facilities outside of the EU. EU member state facilities, in general, provide either bespoke local solutions to a niche recycling market or are focused on offshore decommissioning; they are not dedicated to recycling large ocean-going ships.

Today, there are still no facilities from the leading recycling countries such as India, Bangladesh or Pakistan on the EU list to meet the demand for recycling larger ships. That is despite many of these yards having made significant efforts toward upgrading their facilities. We believe the focus on adding some of these facilities to the list should be increased if they meet the standards of the Hong Kong Convention. We believe the Hong Kong Convention should be ratified as soon as possible.

There is significant potential for the ship recycling industry to contribute to the circular economy because it supplies large quantities of scrap metal to the steel and iron industries, which reduces the need to produce primary metals. To take one example, a study commissioned by the World Bank in 2009 found that Bangladesh satisfied 50% of its steel needs from national ship recycling.

It is estimated that more than 15,000 ships will be recycled in the next decade, so the potential of ship recycling to contribute to the circular in a manner that is sustainable and safe for workers and the environment is tremendous. The Hong Kong Convention will allow for the safe and environmentally sound recycling of ships internationally; therefore, shipowners should choose to recycle at yards that follow the standards and live up to the Convention. To raise awareness of this critical issue, we are working on a short industry film about ship recycling*which will be published later this year.

* The film Sabrina Chao mentions has been launched since publication of this interview. Watch it on our Ship Recycling page.