Cooperation is the Key to Ferry Industry's Future

Last April, I took the helm of Interferry after 14 years in leadership positions with Canada’s BC Ferries – the last five as president and CEO. The past ten months in my new role have reinforced a core conviction forged during my previous experience in the industry. Both as an operator and long-time Interferry director, I saw that our members are stronger when we work together to embrace opportunities, overcome challenges and share our knowledge for the benefit of the entire ferry sector. This belief is now being reaffirmed as the association further builds on its mission as the industry’s global voice.

A prime example came in October at our 42nd annual conference in Split, Croatia, with the introduction of our new Domestic Ferry Safety Committee. Formed to support developing nations, the committee’s first task is to identify drivers for change and carry out a risk assessment. We will then draw up an action plan to reach out to potential collaborators and funding partners. The initiative has been prompted by statistics showing that 93% of fatalities occur on domestic routes and have totaled at least 60,000 deaths over the past 50 years – a toll that is almost certainly underestimated. Of the known fatalities, no less than two-thirds of these occurred in just seven countries, notably in the Philippines, Bangladesh and Indonesia. There could hardly be a stronger case for pulling together in the common cause of safety.

Meanwhile Interferry is working closely with the European Maritime Safety Agency (EMSA) to identify required, relevant and realistic changes to current fire protection regulations following a string of fire incidents on ro-ro and ro-pax ships in recent years. Our initial findings indicate that most of the fire risk relates to the cargo carried rather than the vessel itself. It’s become particularly clear that electrical connections – such as those for reefer units – need special attention, but there are also valid concerns on the functionality and effectiveness of traditional detection and extinguishing systems. Several of our members are developing new internal practices, which will form the basis for a second round of Interferry fire safety best practice guidance during 2018.

Alongside this, Interferry has now launched a Security Committee, which will likewise develop a best practices guide over the long term. The committee is comprised of company security officers from a dozen operators and has been established with the primary function of facilitating experience-sharing among members. To an even greater degree than other major issues such as safety and environmental regulations, security measures will need to be more fully addressed on a risk basis, and in close cooperation with local and national authorities. We do not expect any universal new requirements from the international regulator, but we will position ourselves to help members better engage in discussions on voluntary measures and local requirements. 

The environment is another area where strength in unity continues to be a guiding principle in protecting the ferry sector’s interests while working to ensure the well-being of Planet Earth. I’m pleased to say that the International Maritime Organization (IMO) is making good progress on developing short, medium and long-term requirements on greenhouse gas emissions from international shipping – helped along the way with sector-specific interventions from Interferry thanks to our consultative status.

Some impatient countries, spearheaded in particular by the European Union (EU), are threatening to impose regional measures. In November, the European institutions agreed to hold off making their own regulations while they wait to see what the IMO decides during 2018. The ferry sector is relatively well placed to meet future requirements, as our frequent port calls will facilitate the use of alternative fuels and will also enable the benefit of electric power from shore installations. Our main concern is the recent discussion on mandatory slow steaming, which may well be a solution for some deep-sea segments, but certainly not for the bustling ferry business. 

The background to all this stems from some ten years ago, when the EU member states pushed other IMO members to agree to binding requirements on reducing CO2 emissions. This was to be linked to some form of market-based mechanism such as an Emission Trading System (ETS). At that time, the EU’s forceful campaigning backfired quite dramatically with developing countries blocking any agreement on resolutions of this kind. Several years without constructive dialogue ensued, but since then we have nevertheless seen the successful introduction of technical energy efficiency requirements for new ships and operational monitoring of fuel consumption.

Supported by several other industrialized nations, the EU bloc is again pushing the IMO, albeit with the ‘wait and see what happens in 2018’ proviso. As such the EU side has drawn a line in the sand – either there are ambitious binding global requirements effective from 2023, or they will unilaterally impose requirements for all ships calling at EU ports. It should be noted, however, that the 2013 global revolt to their inclusion of international aviation in an EU-run ETS left a distinct impression on some of the European institutions and led to their November decision not to include shipping in an ETS – at least for now.

As I have indicated, from a ferry industry point of view, we are not overly concerned with the impact of future climate regulations. Our members have improved their efficiency dramatically over the past generation of ferries and huge strides are still being taken, such as the rapidly increasing electrification of ferries. Most would agree that, when the dust has settled, there will be a cost associated to CO2 emissions, but the general prediction is that such costs will be in the order of magnitude of the normal fluctuations in fuel prices. Although that is not exactly welcome news for the bottom line, such costs are manageable.

The initial discussions on speed reductions for ships are more worrying. The main attraction of ferries as a mode of transport is that we can compete with highways and aviation. Slowing down has, on average, been proven as a good way to temporarily mitigate overcapacity in deep sea trades, but it would be very challenging to the ferry business model. 

Furthermore, in a segment where operating speeds for conventional ferries range from 12 to 26 knots, it is hard to envisage an equitable way of mandating slower speeds in our particular sector. Interferry, with ample support from its members, has spent a lot of resources trying to make the existing requirements of the Energy Efficiency Design Index (EEDI) work as intended. If there is any hard-earned lesson from that exercise, it is that – unlike tankers, containerships and bulkers – the ferry industry is far too diverse to be treated as a homogenous entity.

We will continue to engage with the IMO and the EU to help them pull the right levers for significant CO2 reductions over the coming decades … but by working together with our members and the authorities, we will make it very clear that one size does not fit all.