From the CSA president, Juan Carlos Croston

Ensuring survival in turbulent times

We often take the connected nature of our world for granted, and nothing has brought this into sharper focus than the events that have unfolded since the start of this year. As we continue to grapple with the coronavirus (Covid-19) pandemic in our daily lives and business operations, it is abundantly clear that the tightly interconnected global environment has been dramatically upended in ways that we could not have imagined.

It is fair to say that at the end of last year, hardly any of us had heard of the Chinese city of Wuhan. However, by the end of January this year it quickly grabbed worldwide attention as the original centre of the coronavirus pandemic. In a matter of months, the world was almost brought to a standstill by this contagion.

Supply Chain Disruptions

The integrity of the shipping industry's supply chain has been placed under immense pressure, and we now find ourselves in uncharted territory. The economic uncertainties emanating from seismic supply chain disruptions are being felt in international trade lanes, ports, factories and ground transportation operations, among other key areas.

Social distancing and the unintended consequence of the mandatory shutdown of various operations, has had a most severe impact on the cruise and tourism sectors. The economic blows of the pandemic will start to show in the second quarter of this year, and we must be prepared for the fluctuation in demand, potential cash flow crisis and other repercussions.

Regardless of the time required to bring the pandemic under some semblance of control, the global implications of the supply chain disruptions will continue to ripple forward for months to come. This situation is a strong reminder of just how much we rely on our many stakeholders, and it is during tough times like these that we must strengthen our collaboration as well as our collective resolve.

Weathering the Storm

While prioritizing the health and safety of employees and customers, some companies have been able to continue doing business seamlessly because of previous investments in "virtualizing" operations to varying degrees. In other cases, we have seen companies scramble to avoid a total shutdown by acquiring technology and conducting online training to facilitate remote working. It is clear now in the age of coronavirus that the survival of any company is intrinsically linked to its capacity to innovate, create, anticipate and adapt. Building this capacity is certainly not an easy task, but it will undoubtedly be worth the effort in the event of unforeseen catastrophes.

Looking beyond the obvious very adverse effects of the pandemic, we should acknowledge its role as a catalyst for business transformation. The current circumstances have validated the idea of reconfiguring work around people, and companies that have positioned themselves to use appropriate technologies, change business processes, methods and hours of operation with agility have been able to better weather the storm. Therefore, it is in our best interest to pursue partnerships with institutions that can help us to successfully leverage innovation, while maintaining closer attention to the areas of disaster planning, business continuity and resilience.

Sustainability

The coronavirus lockdowns that have led to a downturn in global business have also had the welcomed effect of a decline in carbon emissions. The decrease in human movement and activities in the first quarter in countries like China, Italy, Germany, the UK and several other countries have experienced improved air quality as the levels of carbon dioxide and nitrogen dioxide temporarily fell by as much as 40 per cent. Many environmental experts consider a glimpse of what is possible if we reduce the human footprint on the planet.

In 2018 the IMO adopted a resolution to reduce greenhouse gas (GHG) emissions from ships, which it sees possible through technological innovation and the global introduction of alternative energy sources. Their strategy targets a 40% reduction in GHG emissions per transport work by 2030 and pushes towards 70% by 2050, benchmarked against 2008. Consistent with the Paris Agreement temperature goals, the IMO’s Marine Environment Protection Committee has set sights on the complete phasing out of GHG emissions across international shipping, starting with a 50% reduction by 2050. There is also a high degree of compliance with the new IMO 2020 regulation, which prevents ships from using fuels with a sulphur content greater than 0.5 per cent, unless mitigated by effective exhaust-cleaning “scrubbers”. It is important to recognize the tremendous work being done in this area by shipping stakeholders such as builders, owners and operators of ships, port and terminal operators, seafarers, bunker suppliers, oil companies, energy providers, regulatory bodies and many others.

Despite the current challenges that we face from the coronavirus pandemic, it is imperative that we continue to ride the momentum to decarbonize the industry and avoid complacency. Some of the world’s leading container carriers have set the early example by announcing that the pandemic would not affect their commitment to reducing GHG emissions. Let us follow suit and hold fast to the overarching goal of achieving carbon neutrality in the not too distant future.

CSEC Moves to May 2021

The cancellation of the 2020 staging of the Caribbean Shipping Executives’ Conference (CSEC) was the only responsible decision the CSA could make after carefully considering the situation brought on by the global coronavirus outbreak. To the participants, speakers and supporters of the conference, we would like to offer our sincerest appreciation for your understanding. We look forward to continued support in 2021, when the conference will be held in St. Lucia, which was slated to host the event this year.

The conference will be greatly missed as a forum for sharing timely and useful industry information and knowledge resources. In its absence, we would like to direct your attention to our website as we continue to do our best to provide you with pertinent news and updates. Recent posts such as the list of technology-based resources to assist companies with maritime-related issues during the pandemic should be extremely useful at this time.

There is a great deal of uncertainty ahead, and there is only one way that we can overcome the challenge – by working together. Whenever this crisis recedes, it is vital that we take a coordinated approach to fully reengaging the supply chain. By taking this approach, we can sidestep any inefficiencies or logjams that may result from efforts to ramp up the recovery as soon as possible.

The CSA remains committed to delivering value to our membership during this unprecedented time and new reality of social distancing. This includes strategizing to evolve interface across our stakeholder networks and incorporate reaching you virtually.

We hope that you stay safe and healthy as we work through this difficult situation together.

Juan Carlos Croston
President
Caribbean Shipping Association