Vessel call optimization, few realities…
The need for improved communication between the ship and the shore-side is acknowledged by many actors including those who participated in the recently published guide on “Just In Time”. Although, the guide focuses only on ships that sometimes wait due to the lack of updates from port stakeholders, it is also important and fair to remind that cooperation between shipping lines and port terminals is a reality in many ports of the EU. It is indeed the best commercial interest of shipping lines and port operators to optimize the calls while reducing shipping emissions in ports. Whether current good practices in this respect could be further encouraged and promoted, the answer is clearly yes.
It would have been also very informative to refer in the above-mentioned guide to the issue of ships’ schedule reliability which is, according to many sources, far from being optimal. Ships which arrive late beyond the allocated window or which skip the call provoke real disruption in the organization of port activities be it with respect to the use of the berthing space, to the optimization of the moves on the terminals’ yards or the use of the labour force.
Shipping accounts for around 2-3% of worldwide GHG emissions and if shipping was a country – it is often pointed out – it would be the 6th GHG emitter in the world. However, only 2% of ships GHG emissions are emitted at ports. Moreover, a European Commission study has found that better ship-shore communication/port call communication can only bring about a 1% emission reduction by 2030. Whereas, shipping emits only 2% of all its GHG emissions while at port, terminals only account for about 10% of emissions in port areas.
The above-mentioned numbers indicate that while port/vessel call optimization is sought, it is not the “magical” solution to reduce shipping emissions, as only 2% of shipping’s GHG emissions happen in and around ports. Moreover, the impact of more efficient cargo handling operations is limited as terminal operations only account for 10% of the total port emissions. It should also be noted that, taking into account the fact that neighbouring cities are very sensitive to emissions resulting from port operations, terminal operators have several years ago met the 2020 target to reduce GHG emissions (as compared to 1990).
Terminal operators have berthing plans including all the liner services expected to call at their facility each week. It is in the terminal operator’s own best commercial interest to optimize the use of its berth facilities. The same goes for port productivity – usually measured as the number of containers handled per hour. In case the targets are not reached, terminals are compelled to pay penalties to shipping lines.
Very often, when ships are waiting, this usually is because they arrive late. According to the International Transport Forum’s figures, schedule reliability, defined as the share of ships that arrives within one day of the scheduled arrival time, oscillated between 65 and 75 percent as of May 2018 depending on which trade lane was measured. There is certainly room for improvement for ships’ schedule reliability.
Ships arriving late can still berth if space has come free due to other vessels also arriving late. This results in a complex planning process; terminals need to meet contractual obligations towards vessels arriving on time, while minimizing delays for those vessels arriving off-schedule. To manage this complex planning process, terminals are already in constant contact with shipping lines to receive updates about their estimated time of arrival (ETA) and change their berth plan accordingly.
Vessels arriving off-schedule also affect the terminal operator’s labour shifts on the docks and yards. Vessels arriving off-schedule will require extra labour force but their owners or managers will not bear the cost of the labour shifts which did not work at the Estimated Time of Arrival.
Another issue disturbing terminals’ planning process are blank sailings, that is the cancellation by a liner company of its weekly service. This is often done at the same time by different consortia and alliances and has tremendous effects on ports. The high fluctuation of blank sailings per month also makes it difficult for terminals to account for this in their planning process. While blank sailings and capacity adjustments represent good solutions for shipping lines, as shown by their recent good financial results, the decisions to cancel calls have huge implications for port stakeholders.
Policy makers should support existing good practices initiated by different Vessel Call Coordination Centres in several EU ports as well as initiatives aiming at aligning standards and data-sharing that enhance port call processes.
Moreover, in view of the significant number of vessels arriving late, schedule reliability should become a priority in order to make the best sustainable use of port capacities. Discussions regarding penalties for ships’ no shows or very delayed arrivals could also be envisaged.
 Guide is the product of a collaboration between the GEF-UNDP-IMO Global Maritime Energy Efficiency Partnerships (GloMEEP) Project and the Global Industry Alliance to Support Low Carbon Shipping (GIA), established in the framework of the GloMEEP Project.
 “Study on methods and considerations for the determination of greenhouse gas emission reduction targets for international shipping”, Final Report: Short-term Measures, pp.55-56, April 2018
 Source: FEPORT
FMC commissioners want closer monitoring of blank sailings
Two of the five US Federal Maritime Commissioners (FMCs), want to look attentively at the agency’s monitoring of blank sailings despite the FMC stepping up its monitoring of how alliances cut and add capacity in response to the pandemic-driven decline in container volumes.
The two Commissioners believed that a review of how the agency tracks blank sailing and impacts the market is necessary as they are not “completely satisfied” with the timeliness with which carriers notify the FMC of blank sailings.
FMC receives periodic briefing and recommendation from staff on their review of alliances’ behaviour. Moreover, under the Shipping Act of 1984, container shipping alliances can cancel on blank sailings as long as it is done to adjust capacity to match lower volumes and they do not cause an unreasonable reduction in transportation services or unreasonable increase in costs.
“The nature of shipping in general because of COVID-19 is a challenge, but I think we are at a point where we need to review what information we’re getting” Commissioner Bentzel said.
Container lines reduced container slot space on the trans-Atlantic and trans-Pacific trades following double-digit declines in container volumes, leading to elevated container spot rates, rolled cargo, and premiums to ensure that cargo will be loaded onto the ship as scheduled. Some forwarders and cargo owners have accused carriers of cutting capacity too aggressively so they can maintain - and even increase - spot freight rates, which as of July 17 were up nearly 70 percent year over year in the eastbound trans-Pacific, as well as secure premiums.
In late April, the FMC formalized interpretive rulemaking aimed at helping it gauge whether levied demurrage and detention fees truly incentivize the retrieval of cargo and return of containers.
03.07.2020 – Opening of first Innovation Fund call
The Innovation Fund has published its first call for proposals for large-scale projects, which is open until October 29th, 2020. A second stage of applications will follow in the second quarter of 2021.
Applications can be send through the EU Funding and Tenders Portal. More information can be found in this call text and on the 14th of July, INEA is organizing a webinar to further explain the application process, which will be web streamed.
The Innovation fund among others focuses on low carbon technologies, innovative renewable energy generation and carbon capture and storage.
The call is open to large-scale projects with over EUR 7.5 million of capital costs.
The total sum to be distributed under the Innovation Fund amounts to EUR 1 billion together with EUR 8 million for project development assistance. However, the Commission might decide to not award all available funds or adjust the call amounts, depending on the applications received and their evaluation.
During the first stage of the application process, projects will be evaluated based on the following award criteria:
- Greenhouse gas (GHG) emission avoidance potential
- Degree of innovation
- Project maturity considering technical, financial and operational criteria
Only during the second stage, scalability and cost efficiency will be looked at.
Source: FEPORT and INEA
07.07.2020 – European Parliament votes to include ships in the EU ETS
On the 7th of July, the ENVI Committee of the European Parliament voted to require ships to reduce their emissions and pay for their carbon pollution.
In order to decarbonise maritime transport, the ENVI Committee voted to include CO2 emissions from the maritime sector in the EU Emissions Trading System (ETS), thus supporting the application of the “polluter pays” principle to shipping.
MEPs also called for the inclusion of a 40% carbon intensity reduction target to be applied to ships when they are in operation, to be met by 2030. Ships must also be emissions free at berth by 2030, which will stop maritime transport from polluting cities while docked in Europe's ports.
MEPs also asked for the current monitoring system (MRV) for emissions from ships to be more transparent and to include all greenhouse gases, as well as methane emissions from LNG-powered ships.
Maritime transport remains the only sector with no specific EU commitments to reduce greenhouse gas emissions. Global shipping activity emits significant amounts of GHG emissions, estimated to be around 2-3% of total global GHG emissions and approximately 13% of Europe's annual transport GHG emissions. In 2019, MSC moved to 7th place in the ranking of EU carbon emitters, if shipping were part of the EU's emissions trading system. Even if required to buy EU pollution permits, European shipping would still be paying seven times less for their emissions than trucks do (through fuel taxes).
The plenary will vote on the ENVI Committee's report on the 14th of September 2020.
10.07.2020 – Virtual Motorways of the Seas event on COVID-19 impacts on the maritime sector
On the 10th of July, FEPORT Secretariat participated in a virtual meeting chaired by European Motorways of the Seas Coordinator Kurt Bodewig, on the impacts of the COVID-19 crisis on the maritime sector. The aim of the meeting was to ensure that the future Motorways of the Sea policy addresses the challenges faced by the various actors comprising the “European Maritime Space”.
The meeting started with an update about the EU Commission’s recovery measures for the maritime sector.
With respect to the immediate economic response, the adjusted State aid rules in times of COVID-19 were discussed for instance the amendment to the Ports Services Regulation, giving Member States and port authorities additional flexibility to waive, reduce, suspend, or defer port infrastructure charges, was mentioned.
Concerning, the long-term Recovery Package Next Generation EU and the 2021-2027 EU budget, which are currently being debated in the European Council, it was underlined that this Package would include an EUR 1.5 billion increase of the general envelope for transport.
After the presentation, industry representatives from various maritime/logistics associations were invited to share their views regarding the impacts, challenges, and opportunities of the COVID-19 crisis.
14.07.2020 – Innovation Fund webinar
On the 14th of July, the European Commission and INEA organized a webinar on the first call for large scale projects of the Innovation Fund, explaining the key features of the Innovation Fund, as well as the selection and application processes.
The aim of the Innovation Fund, it was explained, is to drive innovative GHG emissions reducing technologies to the market, by funding up to 60 percent of the costs that companies cannot cover through market revenues. The fund can also partially cover innovative technologies’ operating expenditure for up to 10 years. The budget will amount to at least 10 billion euros and will be financed through ETS revenues. Calls will be launched annually for both small scale and large-scale projects.
Regarding the application process, applicants need to go through two stages. In the first stage of the call, of which the deadline passes 29 October 2020, applications will be judged on the potential for GHG emission avoidance, degree of innovation and project maturity. Only during the second stage of the call, which will open in 2021, will also scalability and cost efficiency be looked at. Applicants can apply both individually and as part of a consortium.
Large part of the webinar dealt with the requirements related to the above-mentioned selection criteria. For example, when assessing project maturity, evaluators would look at both technical, financial and operational maturity.
Concerning the provision of grants, the Innovation Fund distinguishes itself from other EU programs as only up to 40 percent will be paid upfront at the start of the project, whereas the other 60 percent or more will be paid upon the completion of milestones related to GHG emission reductions.
The webinar has been recorded an can be accessed through this link.
21.07.2020 – European Council agrees on MFF 2021-2027 and post-COVID recovery instruments
On the 21st of July, the European Council reached an agreement on the Post-COVID economic recovery package Next Generation EU (NGEU) and the EU budget for 2021-2027.
The Council will now enter into negotiations with the European Parliament, which will have a say on the 2021-2027 MFF before the current budget expires on 31 December 2020. Also, national parliaments’ consent is required for the entry into force of the 2021-2027 MFF and NGEU.
In order to collect the necessary funds for NGEU, the Commission will be authorised to borrow funds amounting up to EUR 750 billion on behalf of the Union on the capital markets.
The borrowed funds can be used for loans up to an amount of EUR 360 billion and subsidies not exceeding EUR 390 billion.
The bulk of the funds distributed under the Recovery and Resilience Facility will be channelled through the Recovery and Resilience Facility consisting of EUR 672.5 billion, of which EUR 360 billion will come from loans and EUR 312.5 billion will consist of subsides. 70% of the grants distributed through the RRF shall be provided in 2021-2022, while the remaining 30% shall be used by the end of 2023.
In order to use the funds of the RRF, Member States are required to prepare national “recovery and resilience plans”, detailing their reform and investment agenda for the years 2021-2023.
These recovery and resilience plans shall be then assessed by the Commission, not later than two months after they have been submitted. The Council needs to approve these plans through Qualified Majority Voting. The Commission shall, however, also ask the opinion of the Economic and Financial Committee. They should try to reach consensus, but if one or more Member State(s) raises objections, they may request the recovery and resilience plan in question to be discussed during the next European Council.
Other funds untapped through NGEU will go to programmes also present in the wider MFF such as Horizon Europe (EUR 5 billion), InvestEU (EUR 5.6 billion) and the Just Transition Fund (EUR 10 billion).
MFF (Multi Financial Framework) 2021-2027
The MFF 2021-2027 comprises a budget of EUR 1.074.3 billion.
A notable feature of the MFF 2021-2027, is the Commission’s aim to introduce new own resources. For example, by the first semester of 2021, the European Commission will put forward proposals on a Carbon Border Adjustment mechanism and a digital levy, with a view of introducing these measures by 1 January 2023. The Commission will also put forward a proposal on a Revised ETS scheme, which will possibly be extended to aviation and maritime. The total amount of own resources allocated to the EU budget shall, however, not exceed 1.40% of the sum of all Member States’ Gross National Incomes combined. The MFF 2021-2027 contains the below relevant expenditures.
1. Single Market Innovation and Digital
Under the next MFF, EUR 75,9 billion will be allocated to Research and Innovation Programme Horizon Europe, meaning this programme will receive a total funding of EUR 80,9 billion, including also the funds allocated to Horizon Europe under NGEU.
EUR 28,936 billion will be channelled to the Connecting Europe Facility (CEF) of which the funds will be distributed as follows:
- Transport: EUR 21,384 billion
- Energy: EUR 5,180 billion
- Digital: EUR 1,832 billion
The Digital Europe programme will invest in key digital capacities such as artificial intelligence and cybersecurity. The programme will complement other instruments such as Horizon Europe and CEF in realizing the digital transformation of Europe. 6,761 billion EUR will be channelled to this program.
- Cohesion resilience and values
The amount of funding for the Cohesion Fund has been reduced by transferring EUR 10 billion of its budget to CEF (see above for the total CEF budget).
- Natural Resources and Environment
The aim is to have at least 30% of total EU expenditure contribute to climate objectives. In order to address the social and economic consequences of the EU’s objective to reach climate neutrality by 2050, a Just Transition Fund will be created, amounting up to EUR 7,5 billion between 2021-2027.
28.07.2020 – Commission published the roadmap on EU Taxonomy Regulation
On the 28th of July, the European Commission has published its roadmap on the EU Taxonomy Regulation. This consultation about the roadmap remains open for six weeks, until the 8th of September.
The EU Taxonomy Regulation will be part of the European Green Deal Investment Plan and will provide a labelling system to discern which investments are environmentally sustainable and which are not.
One important aim of the EU Taxonomy Regulation is to establish technical screening criteria to determine the environmental sustainability of an economic activity in line with its objectives, in view of allowing investors to determine which economic activities are sustainable.
When developing the technical screening criteria, the Commission will consult with the Sustainable Finance Platform, consisting of experts representing both the public and private sectors.
04.08.2020 – Fourth IMO GHG study
On the 4th of August, the International Maritime Organization (IMO) released the final report of the Fourth IMO Greenhouse Gas Study. The study finds that total GHG emissions from maritime shipping rose about 10% from 2012 to 2018.
Methane represents a rapidly growing share of GHG emissions from shipping and its emission increased by 150% from 2012 to 2018, growth that was largely due to a surge in the number of ships fuelled by LNG. The study highlights the need to include methane in future phases of the IMO’s Energy Efficiency Design Index (EEDI) regulations. Currently, only CO2 emissions are limited under the EEDI.
Demand for shipping grew twice as quickly as fuel efficiency improved over the study period. In the future, business-as-usual GHG emissions from shipping are projected to increase by up to 50% above 2018 levels by 2050.
This report will serve as a key resource as IMO works to revise its GHG strategy. To achieve IMO’s goal of cutting GHG emissions from international shipping by at least 50% from 2008 levels by 2050, regulations that spur innovation and widespread adoption of the cleanest, most advanced technologies are needed.
08.04.2020 Board of Directors – Remote
16.04.2020 Environment, Safety and Security Committee – Remote
22.04.2020 Social Affairs Committee – Remote
27.04.2020 Port Policy Committee – Remote
28.04.2020 Customs and Logistics Committee – Remote
06.05.2020 Board of Directors – Remote
25.06.2020 General Assembly – Remote
16.07.2020 Port Policy Committee – Remote
09.09.2020 Social Affairs Committee – Remote
10.09.2020 Environment, Safety and Security Committee – Remote
14.09.2020 Port Policy Committee – Remote
17.09.2020 Board of Directors – Brussels
21.10.2020 Customs and Logistics Committee – Brussels
04.11.2020 Port Policy Committee – Brussels
05.11.2020 Environment, Safety and Security Committee – Brussels
12.11.2020 Social Affairs Committee – Brussels
18.11.2020 Board of Directors – Brussels
01.09.2020 EMPL Committee Meeting – Brussels
02-03.09.2020 TRAN Committee Meeting – Brussels
02-03.09.2020 ENVI Committee Meeting – Brussels
07.09.2020 EMPL Committee Meeting – Brussels
10.09.2020 ENVI Committee Meeting – Brussels
28.09.2020 ENVI Committee Meeting – Brussels
01.10.2020 EMPL Committee Meeting – Brussels
12.10.2020 ENVI Committee Meeting – Brussels
15.10.2020 EMPL Committee Meeting – Brussels
28-29.10.2020 TRAN Committee Meeting – Brussels
28-29.10.2020 EMPL Committee Meeting – Brussels
28-29.10.2020 ENVI Committee Meeting – Brussels
01.09.2020 Waterborne general Assembly – Online Event
07-09.09.2020 “Triggering greening and international competitiveness of shipping and ports” Ministerial Conference – Hamburg
16.09.2020 Hearing on the initiative for a Strategy for sustainable and smart mobility – Online Event
18.09.2020 European Port Forum – Online Event
22-24.09.2020 8th Mediterranean Ports and Shipping Conference – Koper, Slovenia
29.09.2020 Workshop on good staff scheduling and rostering practices in transport – Brussels
02.10.2020 Workshop on the social dimension of the transition to automation and digitalisation, focusing on the transport labour force – Brussels
04-05.11.2020 European Environmental Ports Conference – Rotterdam
04-05.11.2020 Global Liner Shipping conference – Hamburg
18.11.2020 Digital Transport Days 2020 – Online Event