Global shipping giants including Cargill, Maersk Tankers, and Mitsui are tacking into wind to cut emissions.

Since supply chains started to recover from the COVID-19 pandemic global shipping routes have been out of sync with established routes. As a result, shipping rates have soared as post-COVID recovery plans demanded shipping capacity in a globalised world. While bulk shipping freight rates have dropped off to some extent, container rates have remained significantly elevated. High freight rates together with elevated energy and raw materials costs have cut deep into the margin of seaborn trade, with the bleak global economic landscape even cutting into typically cost-driven markets.

The shipping industry transports much of the world’s trade and accounts for around 3% of global greenhouse gas emissions. The International Maritime Organisation (IMO) has set an initial strategy of cutting greenhouse gas emissions from the global fleet by 50% by 2050, from 2008 levels. With various avenues being pursued, the focus on emissions curbs for the industry is accelerating the adoption of wind energy from both old concepts and new innovations to help move the industry in the right direction. Retrofitting ships remains a capital-intensive hurdle but as most carbon-intensive industries start to address their contributions toward net-Zero, the shipping industry seems to be aware that it needs to join the party.

In the meantime, high energy costs and supply chain criticality exacerbated by geopolitical tensions are turning globalisation on its head. Domestic and shorter supply chains are trending upwards to address supply security amid wars, geopolitics, and global lockdowns. The shipping industry still has rough waters ahead as a new norm is yet to be defined.