Ferry Business - Autumn/Winter 2022

In association with SAIL ING INTO THE FUTURE Carsten Nørland shares how Scandlines is delivering improved environmental performance PEOPLE POWER Interferry CEO Mike Corrigan outlines future challenges CONNECT IVIT Y Michael Grey explains the value of efficient ferry links

COMMENTARY 7 4 Power and people – ensuring the future success of ferries Interferry CEO Mike Corrigan outlines the key challenges being addressed by the global trade association in an intensive lobbying campaign and conference programme MIKE CORRIGAN A Canadian former energy industry executive, Mike Corrigan joined Interferry in 2017 after 14 years with BC Ferries – among the world’s largest ferry operators – where he was president and CEO from 2012. How can we attract and retain the highly skilled workforce that, more than ever before, is required to serve the fast-evolving ferry industry? And how do we ensure a long-term future for our industry and personnel in an age when environmental sustainability will become increasingly crucial to the viability and appeal of ferry travel? These issues have long been at the core of Interferry’s thinking but questions gathered pace in 2022 and prompted the ‘Power and People’ theme of our 46th annual conference, which will be held in Seattle, Washington, on 1-5 October. Challenging regulations for reducing greenhouse gas emissions demand that operators make interim cuts of around 50 per cent by 2030 and achieve net zero status by 2050. Fully electric or hybrid power systems have been clearly identified as the ship propulsion solutions to help our sector achieve such daunting targets. Ferry operators are leading pioneers in the transition to decarbonisation, but we can’t do it alone. The innovations being implemented onboard ships must be matched by massive expansion of the shoreside electricity grid. This will enable ferries to recharge their batteries for propulsion rather than merely for cold ironing consumption at berth, which is the level of provision at most existing facilities. As such, Interferry has launched a global lobbying campaign urging governments and port authorities to invest in onshore power supply (OPS) infrastructure, and we have already made significant progress. In May 2022, we agreed a joint programme to promote the provision and use of OPS with the European Sea Ports Organisation, CEO of Condor Ferries John Napton with Mike Corrigan during a panel at the 2021 Interferry conference in Santander, Spain

7 5 European Sea Ports Organisation secretary general Isabelle Ryckbost and Mike Corrigan at their Brussels meeting in May 2022, where they agreed a joint OPS action plan and further influential alliances are in the pipeline. Notably, Cruise Lines International Association president and CEO Kelly Craighead indicated support for a joint statement of intent when we met as speakers at the World Ports Conference in Vancouver, also in May. I now plan to seek similar support from other shipping association partners whose goals are aligned with ours. Craighead will be a keynote speaker at our own conference, examining the parallel universe that exists between the ferry and cruise businesses, both of which have to confront the challenges of crewing their vessels and meeting zero emissions goals. Sessions held under the Power theme will explore the details of making OPS a reality, fuelling the future – including green hydrogen production – as well as propulsion efficiency and battery technology. Meanwhile, sessions for the People theme will include presentations about engaging young people in a maritime career, workforce outlooks and trends, and dual courses of study. In addition, working on the assumption that not all our working requirements can be met by hiring enough skilled people, we will also discuss how automation can fill any gaps. Each of the two days in the speakers’ programme will also feature three presentations on green vessel projects, with designers, builders and operators outlining leading-edge developments ranging from fast urban transport electric ferries to large hydrogen fuel cellpowered passenger vessels. Both days will also conclude with our popular panel sessions. On the first day, the roundtable discussion on conference topics will involve key ferry leaders representing the diversity of our association. The panel on day two will focus on innovation, bringing together a wide range of activists for transformational change in what promises to be a highly thought-provoking session. There is no doubt that the ferry community, like other sectors of the maritime industry, is facing an unprecedented wave of human and technological challenges. But equally – as I’m sure our conference will testify – there is also no doubt that our proven ingenuity and determination will win the day. Power to the people! CFR “ Ferry operators are leading pioneers in the transition to decarbonisation, but we can’t do it alone”


Interferry.com InterferryConference.com @InterferryOrg Interferry Engaging Young People in a Maritime Career Workforce Outlook and Trends Dual Course of Study The Cruise Industry – A Parallel Universe Regulatory Update: IMO/EU and LASH FIRE Bridging the Gap through Automation Vessel Project Features 1 Environmental Certifications for Ferry Operators Black Sea Operations Ferry Leaders Panel Making Onshore Power Supply a Reality Fueling the Future Propelling Efficiency Vessel Project Features 2 Leading the Charge – Batteries Innovators Panel SPEAKERS PROGRAM CORRIGAN CRAIGHEAD HOLLOWAY PAHNKE RUBSTELLO Bell Harbor International Conference Center FRS Clipper Our Speakers Program promises to deliver another world-class event centered on the dual theme of “Power and People”. The “People” topics include workforce outlook and trends, dual courses of study, and bridging the gap through automation. Our two keynote addresses include a presentation by Kelly Craighead, President and CEO of CLIA (Cruise Lines International Association), about the parallel universe that exists between the ferry and cruise industries. During our second keynote, Tremain Holloway of Highline Maritime High School will discuss how his school’s program is engaging young people in a maritime career. The “Power” presentations will feature comprehensive sessions and presentations onmaking onshore power supply a reality, fueling the future, propulsion efficiency, and leading the charge with batteries. Both days of the Speakers Program will have a session on green vessel projects with designers, builders and operators discussing their exciting leading-edge projects. Our engaging and informative roundtables will once again be the final sessions of each conference day, with day one featuring a ferry leaders panel and day two featuring ferry industry innovators. Our outstanding program of networking and social events includes aWelcome Reception at Chihuly Garden and Glass and the iconic Space Needle, a Networking Reception at the Boeing Museum of Flight, and the Farewell Dinner at the Kiana Lodgewhichwill showcase Pacific Northwest Indigenous cuisine and culture. The always popular Technical Tour will complete the conference events. POWER and PEOPLE Interferry Co-Presidents Patty Rubstello of Washington State Ferries and Matthias Pahnke of FRS Clipper will host this year’s conference, and will welcome you to Seattle along with CEO Mike Corrigan and the Interferry team. The conference website has all the up to date information you will need about speakers and sessions; registration; hotels; networking and social events; activities; and sponsorship. Check the website often and followour social media accounts for news and updates.

7 8 There hasn’t been a dull day since Patty Rubstello took over from Amy Scarton as assistant secretary for the ferries division of Washington State Department of Transportation in January 2021. The pandemic has left a deep mark on Washington State Ferries (WSF), both in terms of ridership and staff turnover – a worldwide phenomenon in the transport sector. Remote working remains the new normal in Washington and according to WSF’s last projection, it will take around five years before the ridership is back to pre-Covid level (close to 24 million passengers), making WSF one of the world’s leading ferry operators. In 2020, passenger numbers plummeted by 41.4 per cent to 13.9 million before improving in 2021 to reach 17.2 million. The 2022 ridership forecast is on track to be similar to 2021 as the USA’s largest ferry system has been marred by staff shortages, which has resulted in delayed and cancelled sailings. “Covid-related crewing challenges mean that we don’t have enough staff to provide all of our services, so we’ve had to scale them back,” explains Rubstello. “We are actively trying to recruit and train up staff so that we can get back to full service. In 2020, we sent home our senior staff who were considered ‘high risk’, which initially curtailed our service, and then people were contracting Covid and we weren’t able to recruit additional staff due to difficulties with training. Last year, our governor decided that all state employees had to be vaccinated and there was a sizeable proportion of our staff who didn’t want to be inoculated, so we lost 130 people overnight in midOctober. Although it doesn’t seem like 130 people out of a total of nearly 2,000 is a lot, all of them were licensed officers with multiple credentials and years of experience at sea and you can’t just pluck that type of person off the street.” WSF requires all captains to have pilotage [exemption] which takes quite a significant amount of time to obtain, says Rubstello. “Even if we can find a captain from a cruise ship or an oil tanker, they still have to obtain their pilotage before they can actually captain our ferries.” On a positive note, the jobs offered by WSF are fairly attractive. “Unlike in the merchant navy, our officers and crew can go home every day,” explains Rubstello. “They get a stable lifestyle and because of that, people want to work for us. Yet, the pilotage remains a stumbling block – it can take eight to 12 months to get it. “When coming into this role in January 2021, it shocked me that WSF didn’t pay its staff to get trained. Instead, captains had to pay themselves to obtain the pilotage and also had to complete training in their own time. Nowhere else in our agency did we ever do this. We knew if we wanted people to stay with us, we had to pay for their training and that’s one of the significant things we’ve changed.” Staff shortages will remain critical in the longer term as 45 to 50 per cent of WSF’s employees are now close to retirement. “For this reason, we need a better system to rise people through the ranks as we will start losing more of our most senior folk,” says Rubstello, Patty Rubstello explains to Philippe Holthof how Washington State Ferries, the USA’s premier ferry operator, is preparing to rejuvenate its fleet and implement hybrid-electric propulsion, despite facing staffing challenges Shifting into high gear FEATURED INTERV IEW

7 9 underlining that workforce diversity is paramount. “We are very much a white, male-dominated organisation but we need to attract people from all different spectrums into our workforce. It’s really a big focus for us to attract people from different walks of life. So, we need to change our culture as once people are here, we want them to stay.” When asked if a lack of licensed staff may accelerate WSF’s implementation of automation technology, Rubstello reveals that it is something the company plans to consider. “One of our staff just shared an article about this concept as we are in the process of starting a procurement for five new vessels,” she says. “The question is should we be making sure our vessels can accommodate it in the future or looking for stuff that we can start putting into the new ships as they are being built? It’s still early days though as we’re just starting to scratch the surface.” Building anew is typically a very slow process in the USA because ships must be built domestically. “Washington has a state law that requires us to have our vessels built within our state,” says Rubstello. “We can only build outside the state of Washington and go to other yards within the USA when quotations are over five per cent above our estimate, which is $200 million per ship. We are going through this procurement process as we speak.” As standardisation is key to keeping maintenance costs down, the new 110.41-metre by 25.35-metre vessels will be a repeat order of the successful one-sizefits-all Olympic-class quartet, delivered by Vigor Industrial between 2014 and 2018. The 1,500-passenger and 144-car capacity Olympic-class ferries give WSF the maximum flexibility to be as uniform and consistent as possible, yet its price tag comes close to what Viking Line paid for its “ We need a better system to rise people through the ranks” Three Jumbo Mark II-class double-enders will be retrofitted with hybrid-electric propulsion systems

8 0 lavish 65,211gt cruise ferry Viking Glory, built by Xiamen Shipbuilding Industry in China. Even so, building abroad, let alone China, is not an option. “It’s not easy for us to build and as a government agency, it’s even harder to be innovative which is one of the struggles we face,” says Rubstello. “The question is also whether there are enough shipbuilders in Washington state that can gear up, not only to deliver five ships, but also do it at a reasonable price. But when it comes to building abroad – which is cheaper indeed – I don’t see this happening in my lifetime.” Rubstello expects the first new hybridelectric Olympic-class vessel to be delivered in 2027, with the other four to follow at one-year intervals. Funding for the newbuilds has already been made available. Full authority has been given to implement hybrid-electric technology for the newbuilds as well as a hybrid-electric retrofit of the three existing Jumbo Mark II-class double-enders, the largest vessels in WSF’s 21-ship strong fleet. “We also have funding to bring shoreside charging power to five of our terminals,” adds Rubstello. Keeping the diesel engine element is necessary as WSF’s ships are not built for specific routes; they are designed to operate across all 10 if necessary. “We need maximum flexibility – there’s some comfort in knowing that you have a backup if electric charging power isn’t there for whatever reason. While it will be possible to operate full electric on the shorter-distance routes – for example, our Seattle-Bremerton route will have charging connections on both sides – this will not be possible on the longer routes, especially when plug-in facilities are only available on one side. Charging shouldn’t impact our operations flow and therefore batteries need to be recharged in 20 minutes.” Rubstello underlines that Jay Inslee, Washington state’s democratic governor, is a huge proponent for addressing climate change and greenhouse gas emissions. “We burn over 15 million gallons of diesel every year. That’s quite significant, so we did a study that came out with the recommendation to implement hybridelectric technology, something fully supported by our governor.” With no coal or nuclear power available in Seattle, a combination of hydro and wind power will be supplied by Federal Energy Regulatory Commission power companies. CFR FEATURED INTERV IEW The Seattle skyline viewed from a WSF ferry

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8 2 INTERV IEW Remaining optimistic Matthias Pahnke tells Justin Merrigan how FRS Clipper coped with extended pandemic restrictions and why he is confident the business and the wider ferry industry has a bright future Sailing between Seattle in Washington, USA and Victoria, British Columbia in Canada, FRS Clipper operates ferry services in what is unarguably one of the most beautiful regions of the world. However, in March 2020, the pandemic forced the closure of the border between the USA and Canada for discretionary travel, immediately halting FRS Clipper’s ability to operate its core international fastferry route. The pandemic subsequently shut down the Seattle-based company’s business for more than two years. Matthias Pahnke, CEO of FRS Clipper and recently appointed director and co-president of Interferry, says: “We remained hopeful that the border would reopen in 2020. Unfortunately, it remained closed, and the majority of the FRS Clipper team had to be laid off. We were only able to retain a handful of employees to maintain business continuity and prepare for our return to business. “In spring 2021, while still restricted from operating our international service, we were able to reinstate domestic operations with San Juan Clipper, which is owned by our US partner. We provided fast-ferry services between Seattle and Friday Harbor, Washington, as well as whale-watching tours from downtown Seattle in a great team effort involving both onshore staff and onboard crew.” While other parts of the world experienced a relatively normal summer in 2021, discretionary travel to Canada was only opened again at the end of the season and even then, was subject to significant restrictions with travellers being required to be fully vaccinated and provide a negative PCR test. Despite these headwinds, FRS Clipper attempted to restart its international service but the restrictions proved to be too much. “Demand was too low, and the restart had to be stopped,” says Pahnke. “After another period of planning and waiting, the PCR testing requirement was finally removed for fully vaccinated travellers entering Canada in April 2022 and we were able to resume international service. “We learned the hard way that ‘hope for the best, plan for the worst’ was truly the only ‘strategy’ that worked. From my perspective, however, it was not strategy that carried us through the pandemic; it was people, our shareholders and our employees. Our shareholders demonstrated incredible patience and trust, especially in 2021 when the rest of the world was reopening while FRS Clipper sat on the sidelines constrained by the lockdown of the US – Canadian border. “Our employees continue to demonstrate incredible dedication and resilience, grinding through the years to keep the company afloat and returning “ Our employees continue to demonstrate incredible dedication and resilience”

8 3 to work for FRS Clipper, despite being furloughed on multiple occasions. I am incredibly lucky to have the chance to contribute to the success of this dedicated and loyal team.” Two years of not being able to travel internationally has created a significant amount of pent-up demand, especially for families and friends to reconnect and once again travel mostly without restrictions. “While demand for travel has been strong for summer 2022, skyrocketing fuel costs are certainly a challenge,” says Pahnke. “Furthermore, staffing challenges continue across the regional maritime and travel industry, requiring all employees to partake in shared additional responsibilities as we recruit for open roles. “Our biggest challenge for a full return to seamless travel remains having guests arrive at our terminal having completed Canada’s required ArriveCAN app prior to crossing the border. We are hopeful and optimistic that these points of friction will continue to ease with time.” Since 1986, FRS Clipper’s business has been built on the back of a yearround, passenger-only, fast-ferry service between Seattle and Victoria. Regionally, FRS Clipper is recognised as the fastest, most reliable way to connect between both cities. Pahnke is upbeat about the brand’s future and believes the ferry industry will continue to be a key facilitator and contributor for the economic success of the region. However, he concedes that the most immediate and challenging issue will be overcoming current staffing issues. “All key maritime players in the industry are struggling to find staff with the right credentials to support vessel and shoreside operations,” he explains. “Threats of a resurging pandemic and recession will linger, but I remain optimistic that by the end of 2023, staffing levels and overall business operations will begin to normalise once again.” CFR

8 4 INTERV IEW A dedicated team effort Justin Merrigan asks Carsten Nørland how Scandlines is progressing on the path to normality and delivering improved environmental performance even with the challenging marketplace Now that I am once again travelling throughout the ferry world, I can only salute all those operators fighting the good fight for a return to normality. One such company is Scandlines, which transported 7.2 million passengers, 1.7 million cars and around 700,000 freight units between Germany and Denmark on the Puttgarden-Rødby and Rostock-Gedser routes in 2019. In 2020, the pandemic forced authorities to close borders between Germany and Denmark and implement temporary restrictions for travellers wanting to enter the countries. Overnight, Scandlines’ business was severely impacted by the extreme market conditions. But now that more people are vaccinated and travel restrictions are being lifted, how is passenger demand changing? “We navigated through the ramifications of Covid-19 thanks to a dedicated team effort and improved performance in a challenging market,” says Carsten Nørland, CEO of Scandlines. “To protect our employees and other stakeholders, we swiftly established teams focused on assessing risks, preparing contingency plans and ensuring compliance with recommendations and regulatory demands through training sessions and other proactive initiatives. We expect to continue on the path to normality despite a continued negative impact of Covid-19 repercussions on traffic volumes.” Despite recent challenges, Scandlines continues to invest to improve sustainability across its business, something it has been focused on for several years. Between 2013 and 2016, it implemented a new hybrid propulsion system on all passenger ferries, which marked a quantum leap in green ferry operations. “Scandlines not only operates the world’s largest fleet of hybrid ferries, but the system is also being copied worldwide and has been a huge success,” says Nørland. “Now we are ready to take the next big step and install the first zero direct emission ferry in 2024. The ferry will be emission-free with a crossing time of 70 minutes, and it will also be able to operate as a hybrid ferry with a crossing time of 45 minutes to serve as backup for the current passenger ferries. The ferry will also be prepared for methanol engines.” Scandlines has also achieved success with its investments in the Norsepower rotor sail. Following the successful

8 5 Scandlines’ hybrid ferry Berlin was equipped with a Norsepower rotor sail in May 2022 installation of the rotor sail on hybrid ferry Copenhagen in 2020 and backed by a year of demonstrated results, Scandlines fitted the same rotor sail onboard sister ship Berlin in May 2022. “With the rotor sail, Scandlines has reduced carbon dioxide emissions from the hybrid ferry by an average of four per cent – and on good days with optimal wind conditions by as much as 20 per cent,” says Nørland. Meanwhile, Prins Richard was fitted with new thrusters and repainted with silicone antifouling paint to improve energy efficiency and further reduce emissions in 2021. This year, the same work will be carried out on Prinsesse Benedikte, the last of the four doubleended ferries on the Puttgarden-Rødby route to undergo upgrades. In total, Scandlines has invested more than €13 million ($13.2 million) to equip the four vessels with 16 new thrusters (four each) and expects to achieve a 15 per cent reduction in carbon dioxide emissions. “We will continue to invest in green initiatives and strengthen our competitiveness by developing our business to cater to the needs of all customers,” says Nørland. “We have therefore set out to realise our zeroemission vision by 2040, and we aim to reach Scope 1 and 2 zero direct emission operations on the Puttgarden-Rødby route by 2030 as an important first step on this journey.” Nørland predicts that Scandlines’ investments in sustainability will drive the long-term future of Scandlines. “The combination of our unparalleled reliability, a unique green profile and bespoke freight and retail offerings forms a solid competitive foundation for our business ahead of the planned opening of the Fehmarn Belt fixed connection in the mid-2030s.” CFR “ We have set out to realise our zero-emission vision by 2040” Photo: Horst-Dieter Foerster/Scandlines

8 6 INTERV IEW This story starts in the 1970s when P&O Ferries signed up to a collective bargaining agreement (CBA) that committed it to a fixed crewing structure. On 17 March 2022, Peter Hebblethwaite was the latest in a long line of the company’s CEOs to be confronted by spiralling losses and business recovery options that were limited by an agreement made almost half a century ago. “The CBA compelled us to operate every ship with two crews in each of two watches, forever,” says Hebblethwaite. “Operationally, this extended to 4.8 crews per ship when holidays, sickness, training and other absences were accounted for. Most other operators manage their fleets with around half the number of seafarers that we were committed to employing. It simply wasn’t possible to operate competitively or profitably with the structure that I inherited.” Hebblethwaite’s predecessors all knew that breaking the agreement would invoke widespread wrath and so dodged Hobson’s choice. So why didn’t he follow the same well-trodden path too? “We had a number of options, but none were very palatable and most only reduced our losses or delayed us having to confront the issue,” he explains. “Only one gave us an opportunity to stem the losses and rebuild a sustainable business for the future. And then ultimately it came down to consult or not consult.” It was inevitable that skipping the consulting phase of the redundancy process would have unpleasant consequences, yet Hebblethwaite believes there was no viable alternative. “If we followed the usual redundancy framework then our most optimistic forecasts were that we’d see additional losses of £309 million ($373.3 million). We’ve been losing around £100 million ($121 million) annually for the past few years and didn’t have anything like this amount available to us. If there had been any other option, we would have taken it.” Hebblethwaite has been cast as the archvillain, yet he counters that he has also protected jobs that could otherwise have been lost too. “I do recognise that we did not consult, but within employment law if you fail to consult you are required to compensate for that, which we have done upfront and in full,” he says. “Furthermore, we have compensated people with the most generous redundancy package in P&O Ferries: a bruised national treasure The once-loved British brand has taken a beating this year. Jon Ingleton catches up with CEO Peter Hebblethwaite to ask how P&O Ferries fell out of favour and whether it can recover

8 7 maritime history. But please can we not lose sight of the 2,200 people whose jobs have been saved. And I’ve been really encouraged and inspired by how these people are pulling together to rescue our business.” With optimism returning within the walls of P&O Ferries’ headquarters at Channel House in Dover, Hebblethwaite remains resolute about the wisdom of his decision and the company’s future prospects. “In the outsourced model that we moved to, which is an industry standard used by the vast majority of shipping operators, we now only pay people that are onboard working,” he says. “This has given us a framework for survival now, and a chance to thrive in the future – importantly a means to protect jobs for the long term.” While ruefully reflective, Hebblethwaite is committed to his purpose. “We saw what happened to trade in the UK when we were not in service – nobody is well-served by an unviable P&O Ferries. Every action that we take is part of a much bigger ambition to radically change P&O Ferries so that we can become an industry leader again. “As difficult as the last few months have been, professionally and personally, context is everything – we get to take an amazing legacy business on an important journey back to being the leading ferry operator in Europe and I am excited about it. I do regret the impact that my decisions have had on 800 seafarers and their families, but I passionately believe that I have a responsibility to save this iconic British brand and protect the 2,200 other jobs that were at risk. It was never going to be easy.” Looking to the future, Hebblethwaite is focusing improvement efforts on three fundamental pillars. “We need to have the most efficient and flexible seagoing operation in the industry,” he says. “We must convert sales into profit more efficiently than anyone else and we have to deliver the best customer experience.” For now, tourism traffic is back to 2018 volumes on all routes other than Dover-Calais where the market is still down across the board, but P&O Ferries is achieving its share of the DoverCalais market and freight customers are returning. Hebblethwaite says that 2022 has become the year for “turning the vicious circle into a virtuous circle.” 2023 will start with significantly more positive news as the company looks forward to the arrival of Pioneer and Liberté, the two new double-enders hopefully dubbed the ‘Ships of the Future.’ Hebblethwaite is confident that their arrival will make a transformative contribution to the business, with a strong play in each of his priority pillars. But there is still a lot of mileage left in this year and much to accomplish as the team in Dover unites to rebuild the fractured brand. Time will judge whether Hebblethwaite et al can turn it around at P&O Ferries. If they do, perhaps critics of the events of 17 March will soften in their judgement? CFR “ I do regret the impact that my decisions have had on 800 seafarers and their families”

COMMENTARY Interferry is collaborating with other key industry stakeholders to lead the global ferry industry to a decarbonised future Striving for meaningful CII adjustments Interferry’s Johan Roos explains the global trade association’s mission to enhance the part ferries play in reducing greenhouse gas emissions Just before the pandemic hit in early 2020, the maritime community had started to develop the International Maritime Organization’s (IMO) short-term greenhouse gas (GHG) measures, encompassing targets and requirements between 2023 and 2030. In doing so, IMO Member States, shipowners, ship operators, green non-governmental organisations and other stakeholders picked up the gauntlet of the European Commission’s so-called European Green Deal. Even with the new remote working and ‘virtual meetings’ setting, I was cautiously optimistic that we could get the job done. However, key elements of the requirements that are due in force from 1 January 2023 are still of great concern to the ferry sector. Back in 2010 when developing the Energy Efficiency Design Index (EEDI), IMO Member States applied a continuous ‘fair and robust’ litmus test – the instrument had to reward organisations for doing the right thing and could not be circumvented. In contrast, this cannot be said of the well-intended, but ill-informed, Carbon Intensity Indicator (CII). This regulation looks at the annual fuel consumption for a ship of a given size in relation to the nautical miles it sails, and compares that with the average for ships in the same category. The ship is then given an annual rating ranging from A to E. If your ship’s mileage and consumption is around the average for vessels of similar size within its segment, it will be rated C – the middle of the pack. With fair winds and following seas throughout the year, the ship might achieve an A rating, but above-average returns for fuel per nautical mile could find it in the dreaded E category for the given year. Within months you must then demonstrate a remedial action plan to class societies and flag states. However, taking a ship’s performance in the previous year as the basis for required improvements in the following year is fraught with problems. Firstly, it does not recognise actual utilisation of the ship – the hallmark of any JOHAN ROOS Swedish national Johan Roos holds an environmental sciences master’s degree from the University of Gothenburg. He has previously worked at both DNV and Stena Line, and was Stena Rederi’s director of sustainability from 20062011 before becoming regulatory affairs director for Interferry. 8 8

8 9 efficiency metric, which is the amount of GHG emitted per gross ton of the ship, per nautical mile sailed. Fully laden and completely empty ships of the same size would get the same ‘miles sailed’ performance score if they covered the same distance, but by default, the empty and lighter vessels will consume less fuel and thus rank better on the CII. Secondly, as per the original EEDI proposition, the CII has been developed without proper reference to different ship types. The EEDI has its merits for tankers and container ships, where smaller and larger vessels have broadly similar designs and service patterns. But applying statistical average methodology to a diverse design and operational population like the ferry sector will not produce a true basis on which to justify requirements costing multibillions of dollars. Interferry made this very point when successfully lobbying for sector-specific ‘fair and robust’ EEDI amendments. Thirdly, operators could inherit the sins of their forbearers. They might buy or bareboat a beautiful vessel that now requires them to find 50 per cent fuel savings because the former operator was less than careful; or they might outcharter a very efficient ship that returns to their fleet needing rectification due to a client’s over-ambitious itinerary. Within the ro-pax fleet, the ‘CII scatter’ – non-conformity to the imagined true average – is immense, with a worrying number of ships falling below the tentative 2030 targets. We deem the consequent corrective requirements to be highly unrealistic for such vessels. The IMO’s Marine Environment Protection Committee rubber-stamped the CII in June 2022 (MEPC 78). There was palpable apprehension about a regulation that blindly stipulates how much fuel a given ship should consume and retroactively penalises non-conformity to this narrow template. Many Member States indicated that they would adopt a soft approach and try their reasonable best, allowing more time to comply ahead of a review of the system due in 2026. Meanwhile, Interferry is advising its members to establish the expectations of their classification societies and flag states during the CII’s initial three-year stint. We will also rally our membership to provide the data and insights indicating how poorly this instrument reflects the true performance of ferries. Our sincere aim is to help the IMO towards regulatory adjustments that enable the ferry sector’s optimum contribution in reducing GHG emissions. CFR “ We aim to help the IMO enable the ferry sector’s optimum contribution in reducing GHG emissions” Is the Carbon Intensity Indicator a good measure of ro-pax efficiency? CO2 emissions relative to size (log scale) Size in GT (log scale) 2.2 2 1.8 1.6 1.4 1.2 1 0.8 3.5 3.7 3.9 4.1 4.3 4.5 4.7 4.9 5.1 Efficiency rating from A/B (light blue line) to D/E (green line), with the dotted yellow line representing the required CII efficiency rating CII efficiency ratings for 358 ro-pax ships show a large scatter of data that Interferry believes does not accurately reflect the real-world situation

9 0 INTERV IEW A new standard Peter Broadhurst talks with Alex Smith about safety in the shipping industry and how Inmarsat’s new Fleet Safety solution can help improve crews’ ability to address incidents The sea can be a dangerous place without proper precautions. Ensuring the safety of a ship is an essential part of sailing, no matter what sector of the shipping industry an operator is working in. However, it’s difficult to assess just how safe the industry is. A lack of standard industry measures means that there is little evidence to compare operator’s performance against, leading to a lack of visibility around the topic outside of internal tracking measures. To address this issue, mobile satellite communications provider Inmarsat has analysed calls to the Global Maritime Distress and Safety System (GMDSS), the worldwide system for automated emergency signal communication for ships, between 2019 and 2021. Its findings were published in The Future of Maritime Safety report in June. “We don’t really have any true indicators around safety,” says Peter Broadhurst, senior vice president at Inmarsat. “There’s no one place to go for statistics concerning safety, and without those measurements nobody can know if it’s being improved. I think everyone would recognise safety as being both important and hard to maintain, so what Inmarsat is trying to do with this report is provide some transparency around what’s happening and hopefully drive up the level of safety for the seafarer.” Despite finding an overall increase in distress calls across the shipping industry, the report found that passenger shipping was among the safest sectors, with only 13 calls over the researched period. Though the reduction in operations caused by the pandemic is likely to have played a part in lowering numbers, operators have also placed a particular focus in addressing safety concerns, says Broadhurst. “ Lessons can be learned by all of us to improve safety levels to where they need to be”

9 1 The Future of Maritime Safety report examined distress calls across the shipping industry between 2019 and 2021 “It’s fair to say that safety record vary across the shipping industry, but in the passenger segment safety is a core concern, which operators do an extremely good job in addressing,” he says. “Given that for the passenger sector you’re discussing the protection of people rather than cargo, and the associated reputational damage that would come from harm to a passenger, safety is very, very important. However, there are still areas of improvement that could be made.” Among the areas that Broadhurst highlights is crew training for dealing with incidents and encouraging them to report any problems that may arise. He suggests that a reluctance to admit that an incident has taken place may be impeding the industry in improving its overall safety records. “Shipping has been around for thousands of years, so I don’t think that there’s anything that should come as a surprise,” he says. “There are processes to deal with every situation, but I’m not convinced that enough is done to make sure that these are carried out. There’s a reluctance to report incidents or reach out for external support. Crew and ship operators shouldn’t be punished if they report it, because we need them to be able to report problems in an open environment for the industry to learn from it and move on.” Broadhurst also suggests that ship operators should collaborate more closely to improve safety by establishing industry-wide standards. “Many ship operators have their own, internal, methods of tracking safety, and insurance providers have data on all the accidents that take place on a ship,” he explains. “But we need to have a benchmark if we are to ensure the industry is improving, because there’s currently some sectors that are less focused on safety than others. That’s the eventual aim of this report, and we’re happy to have constructive feedback about what needs to be included within it to support the industry. Lessons can be learned by all of us to improve safety levels to where they need to be.” Inmarsat is making its own contribution to safety in the industry with the development of a new solution, Fleet Safety. The data service, which has been approved by the International Maritime Organization, supports GMDSS compliance for voice and data distress, along with urgency and safety communications. Combining a Maritime Safety Terminal with existing services provided by its FleetBroadband or Fleet One solutions, Fleet Safety provides a more comprehensive range of safety features.

9 2 A panel of experts, including Inmarsat ’s Peter Broadhurst, discussed the findings of the Future of Maritime Safety report at Posidonia 2022 “With the Fleet Safety service, we’ve built a system that meets the regulations and then added extra features on top,” says Broadhurst. “Firstly, we asked the search and rescue community what they wanted, and they highlighted the need for good communication. So we created a server solution that allows us to connect rescue coordination centres together. For example, if an incident occurs on a vessel, the ship can choose which rescue coordination centre it sends the distress to, which would then call in a ship that’s close by to assist.” Fleet Safety also provides real-time Maritime Safety Information broadcasts, which can be downloaded even after the broadcast time and when the Maritime Safety Terminal has been turned off; for example, when in dry dock or ports where reception is compromised. “We built a platform for the maritime safety providers who send out proactive messages, warning of weather conditions, a navigation light not working or even a tsunami” says Broadhurst. “The new platform means those providers can have confidence that the message they’re sending out is being delivered. We’ve also created an application programming interface so that they can create messages themselves and then just fire them off to Inmarsat, which we then send over to our existing service and our new service, taking the hassle out of the process.” Inmarsat will also provide operators with the capability to train their crew in the use of the new system to ensure they can adapt quickly. “It’s not just about creating a new product and throwing it over the fence and saying, “there you go”,” says Broadhurst. “Everybody who is going to use the system should do so without fear and in full knowledge of what it’s supposed to do. So we created a module that will train seafarers in their general operators certificate as well as the new safety services.” Broadhurst highlights the service’s capacity to condense information in a way which ensures that it can be processed effectively by crew in their efforts to maintain safety. “There’s so much information these days for the Officer of the Watch or the Navigator to take in,” says Broadhurst. “Fleet Safety puts the control of information back in the hands of seafarers. We’ve been very selective in making sure that only relevant messages are shown urgently to crew, while other information is available if needed. This wasn’t available with the old system, and will raise the level of safety. It’s a system that’s built for the future.” CFR INTERV IEW

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9 4 COMMENTARY The value of an efficient ferry link Many people regard ferry services as merely a mode of transport, but stakeholders should consider how they can be used to drive socio-economic improvements for the communities at both ends of the service MICHAEL GREY Michael Grey is a master mariner turned maritime journalist and has edited both Fairplay and Lloyd’s List in a career spanning more than 60 years. People who are dependent upon a ferry link invariably seem to complain a lot. They moan about everything from the price of a crossing to the fact that the timetable offers sailings that do not suit them, the standard of the ships, and even the fillings in the sandwiches. This is essentially what somebody who ran one of these lines to and from an island told me when I met him a few years ago. At the time I thought he was being a little unfair to himself as the users of just about every mode of transport habitually complain about all these matters. In fact, that very day I had been raging about a cancelled train. These days, of course, dissatisfied customers are better organised and often form collective groups to harass the management of their transport links and create powerful lobbies to belabour local politicians to “do something”. In the USA, customers often engage in class action and lawfare in pursuit of their aims. In many cases, the dissatisfaction of frustrated travellers who are dependent upon ferry links will be thoroughly justified. As a current example one needs to look no further than both the services around the West Coast of Scotland and those to the Northern Isles, both of which are attracting a great deal of opprobrium related to service issues. Here, ageing and broken-down ships, vessels unsuited for the vehicles that wish to use them and the inability of the government to grasp the need for better transport are permanent reminders of the complaints about these Route Sea Road in Victoria, Australia, was founded in 1987 and now carries more than 900,000 passengers per year

9 5 subsidised services. Frustrated islanders have even drawn on some energetic excavations on the Norwegian coast to suggest that some of the islands ought to be linked by tunnels. Those running ferry services for people who have few alternative transport choices are often accused of providing the very minimum service that they can get away with, or that parsimonious governments are able to afford. However, there is a strong case for regarding a ferry service not merely as a means of transport across a patch of water, but also as a way of growing value on both sides of the link. This was perhaps better understood in the past than it is today – one can easily think of towns, even cities, that originally prospered because of the ferries that connected them. Early in summer 2022 there was an interesting conference held on Scotland’s River Clyde about the provision of suitable ferries for the coastal communities that have been complaining about the standard of their shipping services. It focused on ship design, with a delegation from Australia sharing their enthusiasm for multi-hulled ships, as well as the need to revitalise domestic shipbuilding which has been languishing since the well-publicised travails of the Ferguson shipyard first hit the headlines. Why should it be necessary for ferry operators to go all over the world for suitable ships, when the Clyde was once a byword for shipbuilding? With a substantial fleet that needs replacement and modernisation, is there not an obvious demand for the re-establishment of a centre of ferry building excellence? Some of this is probably speculative and even fanciful, as it has been traditionally almost impossible to restart commercial shipbuilding in any area once the grass has grown on the launching ways and the skills dispersed. But it was suggested, that if we regard a ferry link as an agent for added value, maybe the attitude to marine transport investment might become more positive. Citing an example in South Australia, where a poor and subsidised ferry to one of the offshore islands had staggered on for years, it was noted that the provision of a modern, efficient and unsubsidised shipping link that offered multiple sailings per day had revolutionised life for those who had previously suffered poor service. The population had grown apace because it was feasible to live, work and even commute where it had previously been impossible as a result of the improvements. It was suggested as an example which could be followed in the Hebrides, where better ships might bring their own reward – in multiple ways. CFR SeaLink’s Spirit of Kangaroo Island now provides commuter links and encourages more visitors to the Australian island