2020 and beyond: emergence of a new era

When Sadan Kaptanoglu took the helm as president of the Baltic and International Maritime Council (BIMCO) in May of 2019, she knew full well that the shipping industry was headed into uncharted waters.

“Shipping is the first international industry to have to comply with global emissions regulations,” she points out. “The first year of the International Maritime Organization’s 2020 sulphur cap regime will be a challenge for everybody. Shipowners, ports, charterers, flag states and class, we will all start learning from the first day.”

Sadan Kaptanoglu
Sadan Kaptanoglu

Kaptanoglu now serves as both President and chairperson of BIMCO and Managing Director of Kaptanoglu Shipping, the family business since 1904. The list of pressing issues is long in both roles, but she is clear on her priorities: “The IMO sulphur cap 2020 is the most important issue for all of us right now. First of all, because it’s good to do what we can for the environment, and every individual has a responsibility. But, of course, also in order to be compliant. We in BIMCO will work with our members to resolve compliance issues as they arise.”

BIMCO is the largest of the international shipping associations, representing shipowners in 120 countries controlling around 65 percent of the world’s tonnage. Kaptanoglu affirms that one of her biggest responsibilities is to maintain a level playing field for members. “Our goal is to achieve even and fair application of regulations for all, and that includes protecting the innocent. Sometimes there is a genuine commitment to comply, but things can happen that make it impossible to meet every requirement in every situation. When non-compliance is not intentional, those parties need to receive fair treatment.”

Ensuring compliance is also a challenge for regulators themselves, she acknowledges. “The IMO’s capacity is stretched to the limit now. In such a demanding situation it is important to maintain dialog and share experiences. We anticipate a heightened level of communication with the authorities in the coming period.”

Committed to compliance

Kaptanoglu is in no doubt of the commitment among stakeholders to comply. “Virtually everyone in the industry is well intentioned. They are making preparations according to their choices. There will be different versions of how to address things, but companies will always strive to comply.”

That being said, she emphasizes that the first real test is coming now. “My advice to shipowners and others is to review everything you are doing very carefully. Be sure you have your plan for compliance in place. Things could of course change, even in the short time from now to 2020, so it is important to maintain close communication with class, flag, charterers, and everyone in the value chain.”

Though the major new regulations place a heavy burden on all, Kaptanoglu warns that shipowners cannot afford to underestimate any regulation, no matter how small. “I believe owners will comply with every regulation to the best of their ability. They know that they must comply in order to work.”

And no sooner than the 2020 sulphur cap requirements have been assimilated, the industry will have to move on to even bigger challenges: “Though it may seem disheartening, IMO 2020 will basically serve as a trial run for the bigger task ahead, that of reducing GHG emissions,” she says.

Seeking new solutions together

In preparation for the next big push, BIMCO has established a speed optimization group with all presidents, past and present, as members. “We have submitted a paper to the IMO suggesting limitation of ship power as a means to reduce emissions. Slow steaming has achieved good results, but when markets pick up, the demand for speed returns. In order to stop the negative effect of this, we propose to regulate the propulsion power of ships. If we want to sustain the greenhouse gas gains achieved by slow steaming, this could be a good short-term solution,” Kaptanoglu offers.

New technologies and fresh innovation will also be needed to meet future environmental requirements, she says. “BIMCO would support a fund to support research on emissions reduction technologies. Everybody is doing their own research, but we could move even faster if we worked together.”

Kaptanoglu reports that BIMCO is also reviewing different models from other organizations. “We have held roundtables with the International Chamber of Shipping, Intertanko, Intercargo and others,” she says. “We are also talking about future fuel solutions with the energy companies, some of whom are BIMCO members. Shipowners cannot bring about the necessary changes by themselves.”

The force of flexibility

BIMCO members have different ideas about how to comply, she adds, including LNG and hydrogen, as well as other fuel alternatives. “I don’t think it will be possible to find a dominant solution like HFO for the future. Maybe we will end up with three or four main options. Companies will pick their preferred solution according to trading patterns, regions, budgets, and more. It’s not like the old days when a decision was made from above and everyone followed along. One size does not fit all anymore.”

Kaptanoglu believes that the ongoing implementation of ballast water treatment regulations will also require a learning period. “Now that it is taking force we have to learn as we go. But shipowners need stability and facts to work from in order to serve their trade. I can see the frustration in the owners’ eyes when they talk about how difficult it is to find the optimal path to compliance, but we have to come out of the pain with something better.” Her advice to members is to comply first, then begin the learning process to arrive at the best solution.

“We cannot predict this future. The technologies look good, but from now on, there will always be room to improve, and always a reason to improve. The time of the 40-year technology is past. We need to be more flexible from now on, but this also means that costs will increase and be passed on to customers.”

Kaptanoglu maintains that shipowners are keeping their side of the bargain. “Now we will see if the rest of the world is really committed, and I want to believe that they are. Remember that freight is only a fraction of the end price. If you want a cleaner world, you have to be willing to pay a little more. Is everyone willing to pay for a cleaner future? This will be the test.”

Making room for all in shipping

Though she is fully occupied with unprecedented regulatory pressures and running a business, Kaptanoglu will continue to address the persistent gender imbalance in shipping. “BIMCO is a 114-year-old organization, and I am the first woman president. That is a great honor. But a one-term woman president could still be seen as a novelty.” With the appointment of Sabrina Chao of Wah Kwong Maritime Transport Holdings Limited as BIMCO president designate, Kaptanoglu believes that BIMCO has entered a new era.

“It’s not that there are no qualified women in shipping. The problem has been that qualified women are often not recognized by the men in the industry, and we must strive to change this,” she says, citing the IMO’s appointment of a committee to work toward empowering women in shipping as a good example.

An active WISTA ambassador, Kaptanoglu admits to finding it strange that diversity is not the norm in 2019. “For me and my family, this is a natural thing. Our family business is run by women and men working shoulder to shoulder,” she relates. “Perhaps we should all be a little ashamed that gender equality has not been established by now. We need to increase the number of women in shipping, and increase their contribution to the industry,” she says.

“Not long ago I met a woman who was technical manager in a large shipping company,” Kaptanoglu recalls. “She said it was encouraging to meet a woman BIMCO president. I replied that it was even more encouraging to meet a woman technical manager. I know this industry, and I know there are very set gender roles in shipping. If women do not see a future here, they will not join. We need to ask ourselves what we can do to convince them that they have a future in shipping.”

Finding strength in unity

Ever since her start at the helm of BIMCO, Kaptanoglu has praise for the work. “Every member has a say, and we are working even closer with other organizations to address problems. This is very important, especially in these challenging times when dialog is more important than ever. I appreciate the way BIMCO is organized and the opportunity this affords me to work closely with the other organizations and the rest of the industry,” she confirms.

“I knew I would be assuming responsibility in a difficult period for our industry, but everyone acknowledges the challenges ahead, so I don’t feel that I am facing it alone. There is a stronger feeling of unity now than ever, and I believe this will continue to grow.” From all the struggles should emerge good things, Kaptanoglu concludes: “I honestly see this as more of an opportunity than a problem, and I will do my best to accommodate the needs of our members and serve our industry during my term as president.”

Endnotes

  1. Regularion by the International Maritime Organization to cap the global fuel sulphur limit at 0.50% from January 1, 2020(http://www.imo.org/en/MediaCentre/HotTopics/Pages/Sulphur-2020.aspx) 

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