Facing up to Covid and climate change challenges

Mike Corrigan, CEO of trade association Interferry, looks ahead to better days in response to commercial pressures in the global ferry industry

Facing up to Covid and climate change challenges
Interferry’s annual conferences allow industry players to share updates on the ferry sector and discuss challenges and opportunities

With the Covid-19 cloud still overshadowing everyday life, there’s no escaping bad news along with the good, but we have to remain positive. On the upside, Interferry’s annual conference successfully returned in October 2021 after being cancelled in 2020, and our regulatory lobbying continues to influence sector-specific solutions on reducing greenhouse gas emissions. At a time of unprecedented crisis, every step towards normal activity is a mark of belief in ultimate recovery.              

Throughout history, shipping professionals have been geared to accommodate the industry’s notorious cycle of peaks and troughs – a mindset that supports both survival and prosperity. For certain shipping sectors, the pandemic has been a blessing in disguise thanks to rising demand for lifeline freight services, including those offered by ferry operators. In contrast, however, the impact on financially crucial ferry passenger volumes has been devastating.          

In my column in the Spring/Summer 2021 issue of Cruise & Ferry Review, I was cautiously optimistic about regaining a viable measure of tourist traffic during the 2021 summer peak. The rapid development and rollout of vaccines, and widespread governmental adoption of Interferry’s best practice guide for Covid-safe travel, encouraged such hopes. However, these were largely extinguished by new variants of the disease and fluctuating infection rates. Furthermore, potential customers were deterred by the cost and complexity of obtaining the tests and documentation required for international travel. Domestic lines scarcely did any better, with carryings typically around 10 to 20 per cent of pre-pandemic levels, and there are still many operators who have yet to resume passenger services at all.   

In Greece alone, for example, ferry companies have predicted total losses of more than €200 million ($232 million) over the 2020-2021 period. They add that passenger traffic could return to 2019 levels in 2022 if Covid outbreaks and restrictions are curbed, but otherwise it will not recover before 2024. This ‘hang on and hope’ outlook is all too familiar throughout the ferry community.      

Against this backdrop, Interferry’s 45th annual conference in Santander, Spain, represented a timely opportunity for industry colleagues to share experiences and strategies within a resolutely proactive theme – The Future is Ferries. As the centrepiece of a five-day event, the October 4-5 Speakers Program featured the long-awaited results of our specially commissioned study on the global ferry market. In addition, London-based transport and logistics specialist L.E.K. Consulting reported on customer research during the pandemic, which suggests ferry travel is supremely well placed to recover quickly post-Covid. 

Other topics included step-change innovation, sustainable newbuilds, the push towards shipboard and landside zero emissions, IT security, safety initiatives and – always eagerly awaited – an overview of latest developments from Interferry regulatory affairs director Johan Roos.        

Our consultative status at the International Maritime Organization has been instrumental in securing outcomes on greenhouse gas (GHG) regulations that recognise the unique diversity of ferry designs and operations. A case in point – in June the Marine Environment Protection Committee confirmed technical requirements under the Energy Efficiency Existing Ship Index (due in force from January 2023) that seem feasible for most ferries and leave non-compliant ships with the option of engine power limitation. This is a far better outcome than some other sectors are facing. 

The committee also discussed the parallel Carbon Intensity Indicator (CII), a continuous improvement plan for operational efficiency. Reduction rates were agreed up until 2026, providing an 11 per cent improvement compared to 2019, but rates were left undecided for the period to 2030, the deadline for short-term measures ahead of a 50 per cent target by 2050. A correspondence group including Interferry was established to consider the outstanding technical and practical details by the end of August. Our main focus was on how to ensure a fair CII dataset for high-speed craft and ro-ro cargo ships.   

Meanwhile the European Union has unveiled plans for a tide of unilateral initiatives, notably Fuel EU Maritime, which will set limits on the GHG content of fuel used by ships calling at European ports and requires passenger vessels to use onshore power supply at berth. Among numerous other proposals, shipping is also to be integrated into an emissions trading scheme. The cumulative implications for our industry are currently very hard to assess, but the policy direction is crystal clear. 

Added to our ongoing pandemic concerns, these are major challenges. But remember – when the going gets tough, the tough get going!

This article was first published in the Autumn/Winter issue of Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed. 

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By Mike Corrigan
02 November 2021

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