Effects of climate change on the global maritime shipping economic-sector

  1. Introduction

Maritime transport as a worldwide economic sector enables globalization and the generation of wealth through trade. This paper will examine the potential impacts of projected climate change on the global shipping economic-sector in the 21st century. For the purposes of this paper, the global shipping economic-sector is defined as commercial maritime cargo transport facilitating international trade via ports accessible by the world’s oceans with three main components: ships, ports and routes.

Climate change will affect the global shipping industry over the 21st century in three main ways: changing weather, warming oceans and rising sea levels. This paper will discuss those anticipated impacts and their uncertainties, as well as some recent climate change impacts on the industry. In addition, this paper will discuss potential adaptations of shipping to climate change.

 

  1. Recent climate change impacts on global shipping

This section will discuss two recent impacts of climate change on the industry with examples. At this time, the main impacts are unusually strong storms and the increasing possibility of trans-arctic shipping.

Major storms

The most notable impacts on the shipping industry recently have been unusual or extreme weather events. Storms and flooding pose a major challenge for the world’s ships and ports. The combination of water surges and high winds can make areas of the worlds oceans unnavigable for periods of time, and can halt or do major damage to port operations and facilities.  (Kopp, 2012)

Hurricane Katrina devastated the port of New Orleans in August 2005. This category five hurricane completely shut down the fifth largest port in the United States for two weeks and reduced its capacity for months after.  (Sayre, 2006) Katrina caused over $400 million in damages to the port and port-dependent businesses and completely wiped out entire sections of the port. (Sayre, 2006) Katrina demonstrates the massive impact storms and flooding can have on port facilities.

Hurricane Sandy hit the east coast of the United States in late October 2013, temporarily forcing major ports like New York and New Jersey to shut down for a week.(JOC, 2012) The physical damage to these ports was not as significant as from Katrina, but the disruption of navigation for ships across a vast area of the highly populated eastern seaboard  meant millions of dollars of goods became stranded and supply chains became delayed. (Allport, 2012)

Though it is difficult to determine if climate change was the main cause behind these unusual, “perfect” storms, it can be argued that their exceptional severity is an indicative of the mean shift in intensity a warmer climate will add to storms. (Lees, 2012) It is telling that Arthur Hatfield, a financial researcher for Raymond James said, “the only time we’ve ever seen a storm [before Sandy] that had a lasting of immediate impact on [shipping] was Katrina.” (Allport, 2012) Many in the industry are aware of the impacts storms can have on shipping and ports, but these recent events have been unprecedented.

 

Northern expeditions

Interest in establishing consistent shipping routes through the North West and North East passages in the arctic is becoming greater and greater. The routes are becoming ice-free for longer portions of the year, and the ice that is there is becoming less thick, requiring fewer precautions for the formerly treacherous journey(Radford, 2013). The North East passage cuts across the arctic coast of Russia, and the North West passage across the arctic coasts of Canada. Both routes significantly cut travel times between countries on the Atlantic and Pacific oceans(Rodrigue, 2011). Though dangerous due to their cold conditions and sea ice, warming temperatures and shorter ice seasons are quickly making them a possibility.

The key indicator of the newfound viability of the North East passage is the success of Danish shipping company Nordic Bulk Carriers.  The company sailed ten trips between Poland and China through this route in 2012, up from one in 2011(Norgaard, 2013). Currently, the sea route is navigable with the help of Russian Icebreaker ships for five months of the year, but unprecedented further retreat of ice continues to occur(Norgaard, 2013)

An indicator of the beginning of success in the North West Passage region due to ice retreat and warming conditions is the success of the Port of Churchill, Manitoba. The port has been booming in recent years, with 700, 000 metric tonnes of cargo moved in 2010, up from 400,000 in 2008. (Evans, 2012) An increase of international shipping traffic to this port is indicative of the growing accessibility of arctic waters.(Evans, 2012)

  1. Anticipated Future Impacts on global shipping

This section will discuss the anticipated future impacts of climate change on the global shipping economic-sector as they pertain to its main components:  of ships, ports and routes. The main climate change factors affecting the supply of global shipping, assuming an increase in temperature of 2˚C or more, are changing weather, warming oceans, and rising sea level. This section will also discuss uncertainties around the anticipated future impacts. This will include a discussion of cascading uncertainty around possible shifts in demand for shipping because of climate change’s potential impacts on commodity production.

Changing weather

An increase in the earth’s average temperature is expected to change the dynamics of weather systems (EPA, 2008). This will likely manifest itself in the increasing intensity and frequency of storms with higher wave height and an increase in periodicity (or frequency) of the waves(Wilkins, 2007). This will mean that ships and ports will be damaged by stronger waves more often. (Wilkins, 2007) Rerouting for storms and reduced regularity of the opening of ports will also be a constant concern. (Wilkins, 2007) These impacts will have considerable effects on the lifetime of port infrastructure and of ships. There will also be economic costs in the form of more fuel for longer routes and delays of cargo. As demonstrated by the Hurricanes Katrina and Sandy examples above, severe storms cause massive disruption to shipping operations.

Higher troposphere temperatures of 2˚C or more also pose issues for port and ship equipment. For example, increased heat could cause damage to equipment like cranes at ports around the world (Panitchpakdi, 2009). This is especially possible if the equipment is made from metal with a low heat tolerance (Panitchpakdi, 2009).  Increases in temperatures will also cause ships carrying perishable goods to use more air conditioning for refrigeration needs (Panitchpakdi, 2009). This would significantly increase the amount of CO2 emissions from ships around the world.

Increased temperatures will lead to more droughts and more frequent storms. (Moser, 2011) It is likely that the combination of these factors will result in run-off increasing sedimentation in rivers and channels. (EPA, 2008) This would limit inland navigation in these areas, increasing dredging costs or making areas inaccessible outright (Moser, 2011) The main impacts here would be on routes and ports. This negative impact could be limited somewhat by the rise of sea levels making inland routes more navigable (Panitchpakdi, 2009).

The Great Lakes in North America could be ice-free and navigable for longer periods of the year with higher temperatures, enhancing maritime trade in the reason. This effect may be counteracted by increased evaporation lowering lake levels. (Moser, 2011)

Warming oceans

            A warming ocean means significant changes in sea ice, changes in water chemistry, and a change of habitats in oceans around the world that will substantially impact shipping. Probably the most high-profile impact is the emergence of an easily navigable Arctic due to the reduction of sea ice. The thickness of sea ice in the arctic has already decreased 22% between 2010 and 2013 (Lees, 2012) and this decline is continuing to open up new arctic routes. It is expected that even by 2050 a route directly over the North Pole will be possible with the aid of ice-breakers, and that routes through the North West and North East passages will be open for substantial portions of the year (Radford, 2013).

climate change rout.png

Figure 1: Potential Trans-Arctic trade routes  2040-2059. North West Passage left, transpolar centre, North East Passage right.

Image via PNAS/ Smith & Stephenson (Radford, 2013)

This opening of trade routes would open up many new possibilities, curbing costs and emissions due to shorter routes needing less fuel and less time, with new direct routes (not using Suez or Panama canals) opening up between Pacific and Atlantic ports(Radford, 2013).  A trans arctic route between Tokyo and New York would be 7000km shorter than traveling through the Panama Canal, reducing time, fuel and transit fees (Panitchpakdi, 2009). It would also allow for megaships too large to fit through the Panama or Suez canals to travel these inter-ocean routes (Panitchpakdi, 2009). The uncertainties of weather patterns, environmental impacts, safety and the seasonality of trans-arctic shipping could limit the appeal for main-stream liner companies. (Rodrigue, 2011)

The chemistry changes in the oceans due to warming will create another significant impact to shipping. Increased corrosion could impact ships and metal port equipment as water in the tropics becomes saltier and warmer (Moser, 2011). Water closer to the poles will likely be less salty due to their proximity to melting glaciers, but warming will still lead to habitat shifts (Moser, 2011). This may mean that conservation zones are shifted, requiring changes to navigation (Moser, 2011). The change in temperatures and habitats will also affect biofouling, the accumulation of plants and algae on ships (Wilkins, 2007). There could be a risk of invasive species being carried to new regions by shipping, and so it is likely that there will be new regulations on anti-biofouling systems on ships (Wilkins, 2007).

Rising sea level

            A rising sea level rise may also impact the global shipping industry, mostly related to endangering port facilities and causing route and navigational changes in coastal areas. Any sea level rise will affect these two areas.

Ports will be impacted by a mean sea level rise. The infrastructure of low-lying ports will be vulnerable to submergence similar to the vulnerability of any coastal areas if sea level rises significantly. (Lees, 2012) Ports would also be vulnerable to more powerful storm surges if sea levels rise and expected 60cm (Moser, 2011). Damage to terminals, warehousing, and intermodal facilities would carry significant cost, especially if some port facilities need to be moved to less vulnerable areas (Kopp, 2012) Waves striking port facilities at a higher level than equipment was designed for could cause structural issues (Moser, 2011). The combination of sea level rise and more powerful storms and hurricanes is especially deadly and would cause significant damage and delays for the industry. (EPA, 2008)

Changes to routes and navigation in coastal channels may occur with sea level rise. It is possible that an increase in the absolute low sea level could allow larger vessels to enter harbours or shipping lanes that were previously too shallow (Moser, 2011). The enabled use of larger ships on routes would decrease shipping costs. Sea level rise will also mean lower clearance for ships under bridges. (EPA, 2008) This could limit the benefit of using larger ships. However, sea level rise may also cause an increase in coastal erosion, further negating the positive potential for larger vessels to be used (Moser, 2011). In addition, new navigational challenges may occur due to the submergence of dangerous features like reefs or rocks that were previously visible (Moser, 2011).

Uncertainties

            The uncertainties surrounding the anticipated climate change impacts are the issues of arctic routes, inland and coastal routes, navigation concerns, industry vs. scientific expectations and the impact of the climate change on the demand for shipping. The research materials gathered were mainly consistent in terms of their scientific credibility. Industry reports made claims consistent with those from scientific, UN or government backed papers. In some cases, the industry reports will go into more detail than the science reports and vice versa, but there are no fundamental schisms. The overarching uncertainty is simply a matter of “how hot will the earth get?” The sources used for this paper claim that virtually all of the impacts on the shipping industry will occur regardless if the earth warms 2˚C or more than 4˚C. The issue, then, is the magnitude of these impacts.

The key uncertainties with trans-arctic shipping have to do with the safety of operating ships in cold and icy conditions, the ownership of arctic regions, safety measures in the case of spills, and the question of if these routes will actually offer substantial economic benefit for the risk (Rodrigue, 2011). The question of rising sea levels and the navigation of coastal and inland routes is governed by the uncertainty of whether a higher sea level will allow for larger vessels to pass through previously shallow routes, or if increased sedimentation will counter that effect for no net change. There are questions and uncertainties regarding how much changing wind patterns and ocean currents will effect navigation and shipping routes, if at all (Moser, 2011). There is some question as to whether industry practitioners are responding to climate change because of a desire to protect the environment or a desire to profit (Gunton, 2012)(Lorange, 2009).

The most interesting uncertainty is probably how much demand for shipping will change due to climate change’s effects on other aspects of the world economy. For example shifting oil demand, new agricultural production zones in northern climes, droughts and an exodus of populations from coastal areas would either create new routes, change routes, or cause a decline in demand for shipping (Wilkins, 2007). Concerns over the cost of energy increasing costs and causing decline in shipping are also a possibility (Lorange, 2009). As a service industry dependent on the dynamics of world trade, climate change’s greatest impacts will likely be indirect, but it is incredibly uncertain what those impacts will be. (Hinchcliffe, 2012)

  1. Adaptation

This section will discuss some of the adaptation options available to the global shipping economic-sector as they pertain to its main components:  ships, ports and routes.

Ships

            The primary and proactive adaptation to climate change is occurring right now: a change in design standards for greater energy efficiency. It is believed that the shipping sector contributes 4% to global carbon emissions, and that figure only seems likely to increase due to industry growth over the next few decades. (Transport and Environment, 2012) There is significant pressure to reduce the industry’s impact and make ships more fuel-efficient. This would be not only effective for curbing emissions, but also for curbing costs. (GCaptain Staff, 2011) Innovations in efficiency will likely be the adoption of higher efficiency propellers, cleaner burning engines or fuel cells, as well as air lubrication and hull redesign to reduce air and water drag (Leemans, 2005).There is also the possibility that smarter wind propulsion techniques could be adopted. A number of companies are designing high-altitude, computer controlled kites that will be tethered to ships for propulsion (GCaptain, 2011); this would significantly reduce costs and emissions, buffering the industry for future changes.

If the industry is to take advantage of the opening of trans-arctic routes through the North West, North East or trans-polar passages, ships will need to be designed to withstand icy and cold conditions. A new standard of ice class ships would need to be built to sturdy standards and could possibly be built larger than ever before due to the lack of canal constraints (Panitchpakdi, 2009).

In general, ships will likely need to be built to a tougher standard in order to withstand greater storms and higher waves. (Moser, 2011) New biofouling technologies will need to be adopted to avoid the risk of transferring invasive species, and governments will likely regulate this transition. (Wilkins, 2007)

Routes

            Overall, there will be a bevy of new navigational problems presented by rising sea levels and melting ice. New potential routes will be available, such as trans-arctic routes, and some inland routes will be limited. Maps and charts will need to be constantly revised to the new conditions, hazards must be marked and regulations for safety on new routes must be developed (Moser, 2011) . Use of a new trans-arctic route would require new acts of protective regulation for sensitive arctic environments, and the expansion of icebreaker fleets (Wilkins, 2007). Some routes will now be able to accommodate larger ships because of a higher sea level, and some routes may be impassable due to lower bridge height or sedimentation constraints (Panitchpakdi, 2009).

To further enhance efficiency and lower emissions, new computer programs may be able to better optimize the routes of shipping to avoid the over transporting of goods. (Leemans, 2005)

Ports

             The primary adaptation of the world’s ports will be to withstand sea level rise and storm intensity. These adaptations will generally require harbour infrastructure to be raised and strengthened and coastal protection methods like seawalls and dikes to be redesigned (Panitchpakdi, 2009). In some cases, ports significantly below sea level may be required to shut down and be relocated. (Kopp, 2012) Some ports will be required to be redesigned to accommodate for ice class vessels if trans-arctic routes are exploited. (Wilkins, 2007) Additionally, there may be a need for growth in ports in areas of northern Canada and Russia (like Churchill, Manitoba) as agricultural production increases in northern areas due to climate warming (Evans, 2012).

Finally, the trend towards just-in-time delivery, a method of reducing inventory costs, will likely come to an end. (Lorange, 2009) The risk of inventory shortages due to extreme weather events disrupting shipping will mean that ports will have to continue to build large warehousing and storage facilities in order to stockpile. (Kopp, 20012)

  1. Conclusion

With 90% of the worlds population living within 100 miles of an ocean, every nation in the world is impacted by maritime shipping, coastal and landlocked nations alike. (Hinchcliffe, 2012) As such, identification of climate change’s effects on global maritime shipping and effective adaptation of the global shipping system to climate change is essential to maintain our global systems.

The shipping industry is a complex system that facilitates 80% of the world’s trade. (Lorange, 2009) The success of the shipping industry is dependent on the health and growth of international trade, and international trade can be crippled when shipping transport fails. Thus, the positive and negative effects of climate change on one will be apparent on the other. Shipping must adapt to continue to be a cost effective global link that supports humanity’s adaptation to climate change. As such, it is of particular interest to examine the potential climate change impacts on shipping.

Word Count: 3000

Works Cited (19)

Allport Cargo Service Knowledge. (2013, November 2).Hurricane sandy hitting freight                   services. Retrieved from http://retailnews.allportcargoservices.com/allport-    knowledge/supply-side-news/hurricane-sandy-hitting-freight-              services/801481114. Accessed Mar. 19, 2013.

 

Environmental Protection Agency. (2008). Transportation impacts and adaptation.      Retrieved from http://www.epa.gov/climatechange/impacts-                  adaptation/transportation.html Accessed Mar. 20, 2013.

Evans, P. (2012, September 13). Arctic thaw heats up northwest passage              dreams. Canadian Broadcasting Corporation. Retrieved from                   http://www.cbc.ca/news/business/story/2012/09/11/f-franklin-northwest-               passage-arctic.html. Accessed Mar. 20, 2013.

 

GCaptain Staff. (2011, April 25). Climate change and the impact on shipping.      Retrieved from                   http://gcaptain.com/climate-change-impact-shipping/ Accessed Mar. 20, 2013.

 

Gunton, P. (2012). Controlling greenhouse gases. R. Asariotis & B. Hassiba           (Eds.), Maritime Transport and the Climate Change

Challenge (1sted.). New York: Earthscan.

 

Hinchliffe, P. (2012). International shipping and climate change. R. Asariotis & B.               Hassiba (Eds.), Maritime Transport and the Climate Change Challenge (1st ed.).          New York: Earthscan.

 

JOC Staff. (2012, November 05). Recovering the port. Retrieved from                        http://www.joc.com/maritime-news/international-freight-shipping/recovering-    port_20121105.html. Accessed Mar. 19, 2013.

 

Kopp, A. (2012). Transport costs, trade and climate change. R. Asariotis & B. Hassiba    (Eds.), Maritime Transport and the Climate Change Challenge (1st ed.). New York:                   Earthscan.

 

Leemans, E., & Luiten, E. (2005). The clean ship. Utrecht: The North Sea Foundation .       Retrieved from http://www.transportenvironment.org/publications/clean-ship-         opportunities-innovation-policy-and-business. Accessed Mar. 14, 2013.

 

Lees, M. (2012). The impacts of a world in transformation on the prospects for                  maritime transport. R. Asariotis & B. Hassiba (Eds.), Maritime Transport and   the           Climate Change Challenge (1st ed.). New York: Earthscan.

 

Lorange, P. (2009). Shipping strategy. Cambridge: University Press,

Cambridge.

 

Moser, H., & Et. Al. Permanent International Association of Navigation Congresses,         Envicom – Task Group 3. (2011). Waterborne transport, ports and waterways.          Brussels: PIANC General Secretariat. Retrieved from     http://www.pianc.org/downloads/envicom/envicom-free-tg3.pdf. Accessed Mar. 20, 2013.

 

Norgaard, N. (2013, January 21). That other arctic passage: Expanded use of the                 northern sea route. Retrieved from http://www.casr.ca/as-arctic-council-                 northern-sea-route.htm Accessed Mar. 20, 2013.

 

Panitchpakdi, S., & Et. Al. United Nations Conference on Trade and Development,               (2009). Maritime transport and the climate change challenge. Geneva: United                   Nations. Retrieved from http://unctad.org/en/Docs/dtltlb20091_en.pdf.             Accessed Mar. 20, 2013.

 

Radford, T. (2013, March 04). Coming soon: Shippers can take the fast boat to   china. The Daily Climate. Retrieved from http://wwwp.dailyclimate.org/tdc-       newsroom/2013/03/northwest-passage-opens. Accessed Mar. 19, 2013.

 

Rodrigue, J. (2011). Polar shipping routes. Retrieved from             http://people.hofstra.edu/geotrans/eng/ch1en/conc1en/polarroutes.html.     Accessed Mar. 18, 2013.

 

Sayre, A. (2006, January 3). New orleans port is getting over katrina. New York Times.    Retrieved from                   http://www.nytimes.com/2006/01/03/business/worldbusiness/03iht-          port.html?_r=0. Accessed Mar. 21, 2013.

 

Transport & Environment Staff. (2012, February 28).Smarter steaming ahead.                  Retrieved from                  http://www.transportenvironment.org/publications/smarter-              steaming-ahead Accessed Mar. 22,            2013.

 

Wilkins, T. (2007, June). Possible effects of climate change on the shipping industry:         Intertanko. WMU climate change workshop, Malmo. Retrieved from                   http://www.intertanko.com/upload/WMUClimateChange.ppt. Accessed Mar. 19, 2013.

 

question, agree or disagree

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s