Written by Mikael Lind, Wolfgang Lehmacher, Richard T. Watson, Jillian Carson-Jackson, Sukhjit Singh, Article No. 119 [UNCTAD Transport and Trade Facilitation Newsletter N°101 - First Quarter 2024]
In the continuously evolving self-organising ecosystem of global supply chains, leaders in the maritime sector should be alert to what fellow leaders consider are critical challenges. This awareness will enable decision-makers to calibrate their strategic choices in areas of shared interest, better manage disruptions, and optimise the deployment of resources to raise productivity and profits across the industry through consistent practices. Empirical studies help decision-makers by informing them about trends and different schools of thought to facilitate participatory decision-making that considers multiple viewpoints. This article summarises the outcome and analysis of a recent survey of a large pool of maritime experts.
A need for multiple oracles
Decision-making in today’s complex world is increasingly difficult because consensus across all stakeholders, whether public or private, is relatively rare. They often have diverse backgrounds with different interests and agendas, which can lead to conflicting points of view. In addition, there can be power dynamics, competing priorities, and split incentives in the competitive maritime shipping environment. Within an international environment, communication can also be a barrier through misunderstandings of terminology, misinterpretation, and cultural differences.
As a result, we have explored integrative methodologies for capturing the plurality of expert views needed to inform effective decision-making. Acting purely on the ‘average’ perspective will likely disenchant some critical stakeholders. Instead, decision-makers should surface the various schools of thought and take a consensus action based on the different priorities.
A method for identifying schools of thought.
In 2023, we used the Delphi method to identify key shipping issues.[1]Delphi is named after an ancient and sacred Greek precinct where an oracle was asserted to live. It aims to generate a consensus perspective over multiple rounds of surveys. It permits participants to view the input of panel peers, allowing the results of previous rounds to influence their views in subsequent rounds to seek opinion convergence. In an increasingly diverse global world, a consensus approach fails to recognize the multiplicity of opinions about a topic.
In this study, we introduce a new method, Claros.[2]Rather than generate a single consensus perspective, Claros is concerned with discovering the different schools of thought among a panel of expert, in this case we sought of opinion maritime industry leaders in the final quarter of 2023. This first use of the Claros method has the following phases:
- Develop an initial list of the critical issues, in statement form, using a Large Language Model (LLM), ChatGPT in this instance.
- Ask a group of maritime experts to review the list and identify issues they would delete from the list as well as those they would add to the list. The study administrators slightly revised the list of issues based on the responses of a few (Table 1), as most agreed with the generated set.
- We followed the Q-method, which required the experts to Q-Sort 3 the revised list, which was presented in a randomized order into five ‘piles’ based on their level of agreement. Respondents were restricted to how many issues they could place in each pile as follows: 2 in strongly agree, 3 in agree, 9 in neutral, 3 in disagree, 2 in strongly disagree. Unlike rating systems, Q-sorting forces respondents to identify their priorities.
- The collected data were factor analysed to identify schools of thought.[3]
Table 1: Key issues
| 1 | Environmental Regulations: Increased pressure to meet environmental standards, especially the International Maritime Organization (IMO) regulations for reduced sulphur emissions. |
| 2 | Decarbonisation: The need to shift towards low-carbon and zero-carbon fuels, with the push to reduce greenhouse gas (GHG) emissions from shipping. |
| 3 | Piracy and Maritime Security: Rising incidents of piracy, especially in regions like the Gulf of Guinea and the Straits of Malacca. |
| 4 | Digital Transformation: Integration of digital technologies like the Internet of Things (IoT), Artificial Intelligence (AI), and automation into shipping operations. |
| 5 | Cybersecurity Threats: Protecting ships and port facilities from increasing cyber threats. |
| 6 | Supply Chain Disruptions: Addressing disruptions caused by global events like the COVID-19 pandemic and the Suez Canal blockage. |
| 7 | Crew Welfare: Issues like crew changes, mental health, and extended contracts due to the pandemic and related restrictions. |
| 8 | Ageing Infrastructure: The need to upgrade and maintain ports, canals, and other maritime facilities. |
| 9 | Trade Wars and Geopolitical Tensions: Impact of ongoing trade disputes and geopolitical tensions on global shipping routes and trade flows. |
| 10 | Overcapacity: Balancing supply with demand, especially in the container shipping segment. |
| 11 | Safety Regulations: Adhering to updated safety standards and addressing the rise in ship accidents. |
| 12 | Bunker Fuel Prices: Volatility in the price of bunker fuels and its impact on operational costs. |
| 13 | Marine Biodiversity: Addressing the impact of shipping on marine ecosystems and ensuring biodiversity conservation. |
| 14 | Training and Skills Development: Adapting to new technologies and ensuring the workforce is trained for modern maritime challenges. |
| 15 | Financial Challenges: Access to finance, insurance premiums, and coping with the economic downturns that affect global trade. |
| 16 | Alternative Propulsion: Researching and adopting alternative propulsion methods, such as wind-assisted or battery-operated systems, to meet sustainability goals. |
| 17 | New ship investments: Which fuel or type of propulsion to choose when ordering a new ship. |
| 18 | Port decarbonisation: Coordinating major port strategies for decarbonising shipping |
| 19 | Shipyard availability: Constraints on retrofits and new builds to meet decarbonisation targets. |
Analysis
Based on the results, we identify five schools of thought, which explain 69% of the variance of the rankings of the 21 responding experts. It is important to note that not every respondent fits into one of these five buckets.
School 1 - People, technology, and biodiversity (19% of the participants and 17% of the variance)
This prioritisation calls for balancing technology, nature, climate, and people. The experts place equal importance on integrating digital technologies such as the Internet of Things (IoT), artificial intelligence (AI), automation, and biodiversity conservation by addressing the impact of shipping on the natural maritime ecosystem. They also include training and skill development, allowing for adapting to new technologies.
This school reflects a holistic human-machine approach to achieving the shipping industry’s transition towards a more nature-friendly and climate-neutral state.
School 2 - Decarbonisation (19% of the participants and 15% of the variance)
The second group focuses on decarbonisation[4] and the concrete need to shift towards low-carbon and zero-carbon fuels to reduce shipping’s greenhouse gas emissions. The experts also identify the importance of port decarbonisation, including coordinating major port strategies for decarbonising shipping.
The IMO 2023 Strategy on Reduction of GHG Emissions from Ships[5] addresses such concerns, and its various indicative checkpoints/targets require a comprehensive approach, such as speed reduction and alternative fuels, to the maritime decarbonisation ecosystem, which is reflected in this school’s priorities.
School 3 - Protection and preservation (14% of the participants and 14% of the variance)
This group is also concerned about the environment but emphasises the implications of cyber risks and the human side of operations - crew welfare. The experts prioritise environmental targets, regulations and their enforcement while highlighting the need to ensure sufficient shipyard capacity for retrofits and new builds to meet decarbonisation targets. Linked to this is a holistic view of the priority to protect ships and port facilities against cyber threats and seafarers’ well-being and mental health.
By broadening the view of the concept of ‘protection’ and risk management, this group highlights the issues of security and business continuity where the ability to ensure consistent and timely crew changes is threatened by extended contracts and increasing operational restrictions. This reflects a broad concept of threats to the shipping industry, including the humanity of shipping, with the need to be willing to act and find solutions.
School 4 - Infrastructure and capacity (19% of the participants and 12% of the variance)
Ageing infrastructure, the need for necessary upgrades and maintenance of ports, canals, and other maritime facilities, and the concern of a mismatch of supply with demand, especially concerning container shipping capacity, are the key concerns of this school of thought.
This prioritisation reflects the volatile market and financial situations of players in the shipping industry as well as the rising challenges around chokepoints such as the Panama Canal and the Suez Canal.[6] Addressing these concerns requires accelerated digitalisation, investments in upgrades and maintenance of infrastructure and alternative routes, e.g., rail and road links in the Middle East and Central America.
School 5 - Safety and security (14% of the participants and 11% of the variance)
The final group prioritises rising risks and ripple effects across global supply chain networks caused by conflicts such as those in Ukraine and Palestine, and the United States-China trade and technology war. Security is threatened by rising incidents of piracy, especially in the Gulf of Guinea and the Straits of Malacca. Successful resolution of these issues lies largely in close collaboration and alignment at the international governmental level. Resolution of these problems becomes increasingly difficult in a fragmented world. Alignment will save seafarers’ lives, support environmental protection, secure the supply of goods, and contribute to global economic growth.
Concluding remarks – a willingness to act on the challenges
The authors thank the maritime experts who participated in this Claros study for their valuable contribution. We call upon the stakeholders of the maritime ecosystem to address the concerns we surfaced in their research, policymaking, and business strategies. The information about the schools and their characteristics may help actors in the maritime ecosystem to find and team up with likeminded parties to share best practices or build coalitions to solve specific issues and help stakeholders to find and coordinate with different minded peers to validate and enhance their own views.
A common theme across the five schools is a concern for people, the environment, and maritime assets, with apprehension for today’s world of increased misalignment and tensions, resulting in rising risks, vulnerability, disruptions, and costs. The good news is that there is a willingness to act and address the challenges. Do we have a choice? The answer is most definitely No. From our survey results, we see a critical need and desire to act on these issues now.
[1] https://unctad.org/external/news/transport-newsletter-article-no-105-how-experts…
[2] Claros was an ancient Greek sanctuary containing the temple and oracle of Apollo.
[3] Factor analysis is a statistical technique for reducing a large number of observations into fewer factors. In this study, we reduced the 21 respondents to five factors. The views of the respondents for each factor are highly correlated and thus represent a school of thought. They rank the issues similarly.
[4] https://maritime-decarbonization.org/
[5] https://www.imo.org/en/OurWork/Environment/Pages/2023-IMO-Strategy-on-R…
[6] https://www.weforum.org/agenda/2024/02/digital-twin-shipping-supply-cha…
Contact the authors:
Mikael Lind | Research Institutes of Sweden (RISE) & Chalmers University of Technology | [email protected]
Wolfgang Lehmacher | Anchor Group & Topan AG | [email protected]
Richard T. Watson | Digital Frontier Partners | [email protected]
Jillian Carson-Jackson | JCJ Consulting | [email protected]
Sukhjit Singh | University of Gibraltar | [email protected]
