Shipping Beyond 2020 — Innovation and Adaptation

Industry leaders gather in New York with a vision for the future

Shipping Beyond 2020

Photo courtesy of Hellenic American Chamber of Commerce
Left to right: Eli Ginsberg, Lloyd’s List; Cheryl Acker, Gard, Kassandra Savicki, Norton Rose Fulbright; Marsila Karpida, Watson, Farley & Williams; Laura Sherman, IRI/Marshall Islands Registry; Meredith Kirby, IRI/Marshall Islands Registry; Boriana Farrar, American P&I Club; Lt. Cmdr. Sarah Brennan, U.S. Coast Guard; Joe Hughes, American P&I Club; Muge Anber-Kontakis, American P&I Club; Norwegian Consul General Harriet E. Berg.

Victoria Hofmo
Brooklyn, N.Y.

The 26th annual Joint Shipping Conference, presented by the Hellenic American Chamber of Commerce and the Norwegian American chambers of commerce, took place on Feb. 4 at the Alexandria Center in New York City.  The strong maritime presence in New York and cooperation between these two countries led to their decision to collaborate in organizing the yearly event.

Over the years, the breadth of issues and influence has grown far beyond the conference’s original focus, which was mostly on financial matters. The change was a necessity for the shipping industry, as environmental concerns, the unpredictability of the seas, and the changing world of finance has shifted.

A changing maritime landscape

“Shipping Beyond 2020 – Innovation and Adaptation” was this year’s themeA synopsis of what to expect came from Hara Gisholt, director of maritime and legal affairs at Core Assurance CR Marine and conference co-chair: “Challenges have always created opportunities for those willing to take a risk and who are not afraid to change their course of action.”

The event began with guest speaker Thomas Joyce, managing director at Deutsche Bank Securities, Inc. His presentation, “Macro Shipping and Economic Overview,” was a comprehensive, insightful, and sobering presentation.

The fact that fluctuations in oil prices have an impact on the industry may seem evident, but perhaps you never considered how this industry is sensitive to the coron­avirus epidemic.

China’s economic growth increased from 4% in 2003 to 17% in 2020, representing 20% of global growth. If the country’s economy slows down, it is felt around the world. Moreover, the geopolitical battle between China and the United States is not only a factor for the maritime industry but for the entire global economy.

Joyce laid out the facts: “China is positioning itself to be the largest economy in the world, from the Marco Polo days, investing in oil, pipelines, digital highways, and investments.”

He further elaborated: “There are 35 bills in the U.S. Congress to get tough on China, cybertheft, etc., indicative of the tone in D.C.”

Joyce pointed out that “many Europeans applaud this tough stance on China,” and from his perspective, this escalation between the two nations, even ideologically, as “only just beginning.”

When the issue of climate change was brought up from the audience, Joyce responded, “I have never in my career of 20 years, seen such a shift in thought and policy, than this one.”

New regulations

The panel chaired by Ole Christian Schrøder, director of environmental compliance for the Scorpio Group and NACC national board president, focused on environmental and other regulations.

There have been significant changes in regulations for vessels. To increase safety, there have been new measures enacted to cut sulfur emissions. Heavy fuel oil with scrubbers has been deemed safer than low sulfur fuel, which contains more black carbon and causes health problems when it gets into workers’ lungs.

Jeremy Osborne, founder and chief technology officer of Boundary Layer Technologies, elaborated on a cargo-carrying hydrofoil that is being developed. There are many advantages with this type of vessel. They can hold 160 containers and be up to three times cheaper to operate, with half the emissions.

Another panel centered on regulatory and corporate governance impact on the industry, which is highly sensitive to local rules and regulations throughout the world.

It was recognized that we are living in quickly changing times. One of the most significant changes is the current U.S. administration’s imposition of sanctions.

Any given company will want to avoid being blacklisted, defined as a Specially Designated Nationals (SDN) and part of the Blocked Person List. In response, the shipping industry now has a huge focus on compliance.

New sanctions have gone deeper into who is connected to the cargo. Matthew Thomas, partner at the law firm Blank Rome, put it this way: “Sanctions have moved from the Treasury Department to the State Department. Their push is to change the culture…. a big ask.”

The good news was that, despite the difficulties, things seem to be working. The American government has done extensive outreach to educate the industry about the new sanctions.

Industry stakeholders have understood the necessity to go through all the machinations, for “as we all know, the primary concern is the U.S. dollar,” said Daniel Tadross, chief legal officer, the American P&I Club.

Financing the future

Another panel tackled the decline of banks and the rise of alternative financing in the industry. The most important takeaway had to do with the industry’s transformative decision that ties environmental stewardship to financing.

Enacted in 2019, the Poseidon Principles “provide a framework for integrating climate considerations into lending decisions to promote international shipping’s decarbonization.” ( This set of guidelines is consistent with the policies of the International Maritime Organization, with the goal to reduce shipping’s total annual greenhouse gas emissions by at least 50% by 2050. With this groundbreaking initiative, the shipping industry has essentially chosen to regulate itself.

Session moderator Larry Rutkowski, a partner in the corporate finance department at the law firm Seward & Kissel LLP, oversaw a discussion with provocative questions about the role of banks and the industry’s future. The banking landscape is changing, as there is now less European and more Asian funding, and banks have had to become more prudent in their lending practices.

Environmental, social, and governance (ESG) factors will now also count in determining borrowers’ credit worthiness. This does not bode well for smaller companies or startups, as they now will have to compete even harder for funding.

Final reflections

In the end, this conference offered much more about the shipping industry than the topics it examined. The greater lesson was the global importance of maritime businesses as leaders in technology, environmental, and health concerns. The industry’s wide reach makes it sensitive to geopolitical issues to a much wider extent than for most other businesses.

The global impact of the shipping industry with its vulnerabilities to geopolitical shifting is not a new phenomenon. Looking back, the first industry sunk by the Great Depression was shipping. As a result of their sudden poverty, Norwegian sailors in New York created a shantytown in the Red Hook neighborhood. This led to social problems, including alcoholism, but for some, it was a new start. There were those who planted flowers outside their makeshift shelters, creating homes and a community.

Then, as now, the maritime industry is a barometer of the health of the world and, therefore, an industry to which we should be paying careful and close attention.

This article originally appeared in the February 21, 2020, issue of The Norwegian American.

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Victoria Hofmo

Victoria Hofmo was born, raised, and still lives in Bay Ridge, Brooklyn, the historical heart of Norwegian New York. She is 3/4 Scandinavian: 1/2 Norwegian and 1/4 Danish/Swedish. Self-employed, she runs an out-of-school-time program that articulates learning through the arts. Hofmo is an advocate for arts and culture, education, and the preservation of the built and natural environment of her hometown, with a love for most things Scandinavian.