LinkedIn: linkedin.com/in/peter-schellenberger-05320

R: Hi Peter, good day, its a pleasure to hear what you have to say about today's topic.

P: Hi Ryan, it is good to speak to you, thank you for inviting me here to answer any questions.

Geopolitical & Economic Issues:

Peter Schellenberger (2nd from left) at Singapore Maritime Week, Shaping Connected Future - June 28 2023 (Photo: Maritime Gateway)

R: The questions is as follows: Beyond immediate solutions, what long-term strategies can the maritime industry adopt to become more resilient to future supply chain disruptions caused by pandemics, natural disasters, or political instability?

P: There will always be disruptions caused by events that cannot be anticipated such as wars, piracy incidents and natural disasters. The way to mitigate such events is to be nimble and agile, reacting swiftly, letting smart systems assist, and collaboration with subject matter specialists. As far as pandemics are concerned, the industry has to work together and increase the pressure on authorities to have seafarers recognized as key workers, which would ensure freedom of movement and priority treatment when moving around the world to join or leave a vessel.

Shipping has already shown a lot of resilience in the face of adversity but one way to improve the situation is to have seafarers being employed on a continuous basis independent of deployment or other forms of incentives. Another key to a flexible and professional response to any kind of challenges is proper training for various areas and situations.

IMPA Singapore, November 2023 (Photo: Peter Schellenberger, (2nd from left))

 R: How can collaboration between governments, shipping companies, and port authorities improve efficiency and reduce bottlenecks within the maritime transportation network?

P: There is a really big scope for positive collaboration, for example around digitalization and integrated processing of related stakeholders. One good example would be the green corridors; like the case of Singapore and Rotterdam, resulting in easier exchange of data, documents and standardized procedures bringing about efficiencies and less paperwork.

Modern technologies such as blockchain (example electronic B/Ls) and AI (example optimized crew changes) can be applied between the stakeholders. Shipping has to realize that it is no longer completely in charge of its own destiny, but part of a larger ecosystem where charterers and other parties have a strong impact on operations.

R: With rising shipping costs, how can the industry find a balance between affordability for consumers and profitability for shipping companies?

P: In my view it is not the industry that needs to find an equilibrium. What is very clear is that the final consumer or user (for bulk items) will have to pay for the consequences of restrictions, green efforts, and regulatory measures. Profitability for shipping companies is very often cyclical, but also closely linked to smart operations; a professional supply chain outfit with scaled procurement contracts results in the best possible OPEX.

It also certainly is vital that owners play their cards right for chartering contracts and route planning, as well as good maintenance and fast adaptation to the requirements of the energy conversion. When converting ocean transport cost into prices, it does not usually heavily impact the price added to consumer items. These prices are not very flexible in most markets but revenues of shipping companies may be much more volatile.

Maritime CEO Forum, Monaco Yacht Club - 7 November 2023 (Photo: Splash247)

R: Are there alternative shipping routes or logistical strategies that could mitigate the impact of disruptions in specific high-traffic areas?

P: There are always alternatives to shipping routes (barring very special cases like the Baltimore bridge incident or vessels caught in Ukrainian ports due to mine risks). For example the Houthi-induced problem in the Red Sea has dramatic consequences on safety and voyage times (8-10 days of additional voyage around the cape of good hope). In response, logistical strategies of shipping clients could be regionalization (production close to use place) and alternative modes of transportation (truck/train).

However it is a clear fact that ocean shipping still is responsible for 90 percent of the goods in the world, and medium terms volumes and trades will increase. Not to forget that large owners and managers with tramping fleets call up to 150 ports each.

Inmarsat Connected Future Conference - 17 October 2023 (Photo: Sea News)

R: As technology like blockchain and AI continues to develop, how can it be leveraged to improve transparency and real-time data sharing within the global supply chain?

P: This is already happening for things such as transport documents, seafarer certificates, and quality certificates. Often, Singapore as a Maritime hub is leading in such coordinated projects between stakeholders, for example the SGTradex project. The industry continues to search for new, useful, and value-creating applications for these new technologies.

There are several industry initiatives that aim to drive data definition, data sharing, and stakeholder collaboration such as the Smart Maritime Network. They engage in projects such as standardization of machinery protocols, digitalized and standardized noon reports, and ESG conformed supplier KYC and onboarding procedures.

 R: The pandemic highlighted the over-reliance on "just-in-time" inventory management. What alternative inventory management strategies could be implemented to minimize disruptions caused by supply chain issues?

P: It must be clear that all safety margins, localized production, and additional stocks, come with a cost that the consumer or user will have to pay one way or another. Many companies have, post-covid, tried to find the balance between a buffer and increased stocks, depending on what their clients are willing to pay. Be it for timely products or how critical the items under discussion are for potential disruption.

A term that has been talked about often is “nearshoring” where raw materials or semifinished products are sourced close to the factory and/or consumer.

R: Thank you for your time and effort spent in carefully listening to and answering my questions. We hope to speak to you again in the future regarding other industry matters.

P: Thank you Ryan once again for inviting me, please let me know if you have any questions in the future.