2 INDUSTRY INTRODUCTION: SHIPPING Danish shipping companies handle around 7 percent of total world tonnage and transport 10 percent of the world s seaborne trade. Moreover, Danish shipping companies share of the value of the world s seaborne trade corresponds to more than USD 900 billion or ten times the value of total Danish exports. Consequently, Danish shipping companies are important players in global shipping and as mediators of international trade. The three largest segments of Danish shipping are tankers, container vessels and bulkers. Together these three segments account for nearly 60 percent of the number of ships owned by Danish shipping companies and more than 95 percent of their cargo carrying capacity. The proportions and experiences of Danish shipping companies have made them global frontrunners in making sea transport as efficient, safe and environmentally friendly as possible. Danish shipping companies have developed successful business models that address the specific focus areas and challenges of their market segments and give the companies competitive advantages. The following cases represent examples of different initiatives from specially designed vessels, safety procedures to installation of environmental performance systems. These cases again represent the different segments of the shipping industry. The cases from the tanker segment focus on ensuring safety and increasing energy efficiency. The former is motivated by the severe environmental consequences of accidents involving tankers. The latter by the fact that the tankers typically steam at high speed in order to deliver the cargo and then reload at another destination.therefore shipping companies aim at optimizing the operation time and reduce fuel consumption and emissions. The case from the container business segment explains how investments in new vessels can help increase port productivity, lower costs and thereby increase trade while at the same time reducing emissions. This is particularly challenging in developing countries where poor port infrastructure and low capacity often prevent the efficiency advantage of large container ships to materialise. The cases from companies in the bulk segment are focusing on the needs to respond efficiently and flexibly to the technical challenges that arise when handling dry bulk cargo in the world s different ports and terminals. This is relevant because dry bulk carriers operate in the tramp regime, which means that the ships and their operators must be flexible to remain efficient.
3 THE DANISH MERCHANT FLEET S REDUCTIONS IN CO 2 EMISSIONS Shipping companies transport about 90 percent of global trade and emit about 3 percent of global CO 2 emissions. Danish shipping companies have been proactive in reducing CO 2 emissions. Since 2008, Danish shipping companies have reduced their CO 2 emissions by almost 25 percent. Source: Danish Shipowners Association, Relatve reduction since 2008, pct CO 2 - Emissions Deadweight Tonnage in mio. tons World view on shipping Benefits of international trade given in terms of economic growth and employment creation are self-evident and indisputable. Gains from trade do not only accrue to rich countries. Reduced trade costs and increased imports of intermediate goods also stimulate productivity, innovation and competitiveness in developing countries. But international trade can only take place if the transport costs are low enough to make trade desirable, making highly efficient modes of transport vital. Sea transport is by far the cheapest compared to air and land transport and sea transport also has lower emissions. And for many commodities, such as coal and iron ore, it is the only feasible way of transport in an economic and environmental sense. Today, sea transport accounts for 70 percent of total transport in terms of value and 90 percent in terms of volume.
5 CLIPPER Clipper's project vessels can service ports with rudimentary infrastructure and can deliver project cargoes such as construction materials closer to their final destination. The elimination of superfluous transport legs can be of particular significance in developing African countries where each additional leg of transport may be prone to inefficiency and generate extra costs. The environment also benefits from the use of project vessels. Clipper has two strategic business units: Clipper Bulk and Clipper Projects. Clipper Bulk controls a fleet of approximately 100 bulk carriers. Bulk cargo services operate both on a contract and spot basis, and the company transports all main types of cargo, including break bulk, primarily between locations in the USA, Europe and the Far East. Clipper Projects operates over 40 multipurpose vessels, which handle cargoes that demand particular care in logistics management and reliability. Clipper employs approximately 300 people worldwide having its headquarters in Denmark and regional offices in 10 countries around the world. Project vessels enable trade Countries with limited port infrastructure are generally not regarded as attractive markets for ordinary bulk shipping companies, which limits the options for sea transport to and from these countries. Clippers project vessels delivers project cargo such as prefabricated steel girders for construction, large pieces of machinery or transport equipment to remote destinations in Africa with limited port infrastructure. The on-board cranes allow for efficient loading and unloading independently of the availability of harbour cranes. The services of Clipper facilitate the countries' trade with the rest of the world and contribute to cost-efficient development of e.g. power stations, industry and transport infrastructure. Environmental benefits The use of project vessels as opposed to ordinary bulk cargo vessels also provides environmental benefits stemming from their flexibility, which prevents transhipment by land and contributes to shorter stays in port. The faster loading and unloading when using own cranes and experienced crew reduces turnaround time. In addition to the intrinsic benefits of using project vessels, Clipper engages in several initiatives to create added environmental value. Clipper uses trim optimisation, meaning that the distribution of ballast is adjusted in order to match current sailing conditions, such as ship load, draught or sea state. Optimised ballast distribution improves the hydrodynamic characteristics of the vessel, which means that less energy and fuel is required to sail the vessel. The company estimates that the annual CO 2 savings due to trim optimisation amount to more than 1000 tons. Furthermore, Clipper implements optimal voyage planning for its vessels. This has brought in significant annual CO 2 savings. Further information:
6 J. LAURITZEN Lauritzen have increased the flexibility of its fleet of bulkers with inventions such as grabs for handling cement. This allows the company to carry cement to destinations that lack the infrastructure to accommodate specialist cement carriers or large ships. The benefits are higher utilization for the fleet as well as cost savings for the client from the cargo arriving closer to its final destination, which also reduces transhipments and environmental impact. J. Lauritzen was founded in 1884 and remains wholly-owned by the Lauritzen Foundation. J. Lauritzen s business activities encompass: Lauritzen Bulkers, Lauritzen Kosan, Lauritzen Offshore and Lauritzen Tankers. The company is headquartered in Denmark and has activities worldwide with offices in, China and Japan, Philippines, Singapore, Spain and USA. J. Lauritzen has about 1,300 employees worldwide and the company controls about 165 vessels. Developing of dust-eliminating grabs Lauritzen Bulkers is a significant provider of tonnage to the cement trade. Besides cement and clinker, Lauritzen uses its fleet to transport a variety of other cargoes requiring special transport arrangement, incl. minerals, agricultural products, wood logs or wood pellets. Cement and clinker is a challenging cargo to load, transport and discharge. A substantial part of the cement business takes place in ports with limited infrastructure whereby both the environment and the physical space available makes it a challenging task to load or to discharge. The greatest challenge is related to the generation of dust, presenting danger to the crew, ship s installations, port infrastructure and surroundings, and the cargoes of other ships. To address this, Lauritzen has developed special dust-eliminating grabs for cargo handling. Loading ships to their full potential The use of grabs also allows the crew to load the ship to its maximum capacity without jeopardizing stability or inducing dangerous structural stresses. Cement has a low angle of repose, which means that it has an inherent tendency to form a cone when it is loaded using conveyors. This gives rise to two problems. A cone can shift on voyage, creating stability problems. Moreover, coning is an inefficient way of loading cargo because it leaves part of the holds empty. The use of grabs eliminates the risk of coning because the operator of the grabs distributes the cargo evenly in the hold. Trained crew reduces risks Trained crew on-board Lauritzen Bulkers ships increases the efficiency and reduces the risk of incorrect loading, accidents and cargo spillage. It also increases efficiency in preparing and cleaning the hold and reduces the risk of improper maintenance of the grabs. Furthermore, the crew is able to leverage its experience to either repair the grabs or remedy the costs in terms of time, money and the environmental damage by taking action immediately. The presence of an experienced crew helps ensure an efficient flow of operations ashore as well. Better utilization of port infrastructure The use of grabs means maximum use can be made of the port capacity available. The infrastructure available in many ports may pose limitations for loading and discharging cement. However, making use of the port capacity available is particularly important in the case of cement and cement clinker because they are low value products. Transport costs can add up to a large part of the final value of the cargo. Better utilization of port infrastructure also means more cargo shipped with fewer vessels entering the port reducing waiting times for others. Further information:
8 MAERSK LINE Faced with infrastructural challenges, Maersk Line has designed a special class of container ships, WAFMAX, that are optimised in terms of size and draught to call key West African ports. The deployment of the WAFMAX ships helps improve the productivity of some of the world's most congested ports by significantly bringing down waiting and berthing times. These productivity gains have positive effects for the local economy as trade becomes both cheaper and more environmentally efficient, thereby creating favorable conditions for West Africa's future growth. Established in 1904, Maersk Line operates container ships. It is the largest business unit in A.P. Moller- Maersk, accounting for app. half of the Group s revenues, with a headcount close to 26,000 in 125 countries. Maersk Line is also the largest container shipping company in the world by capacity, with a global market share of 15 percent and a presence on every major trade route. Maersk Line operates a fleet of more than 600 ships. WAFMAX is an abbreviation for Maersk Line s 22 new West Africa Maximum ships, which have been designed to meet the growing trade volumes between Far East Asia and West Africa. As the name implies, these vessels increase the current maximum capacity level of shipping lines calling West African ports and are the biggest vessels ever to serve the region. The challenge of West African ports The African continent is heavily dependent on international trade. Intra-African trade only constitutes 11.5 percent of the continent s total trade and the bulk of Africa s international trade (oil, minerals and agricultural products) is transported by sea. As a consequence, maritime trade accounts for more than 90 percent of the continent s imports and exports. The ports of Africa therefore play a fundamental role in facilitating Africa s integration with international trade. Yet West African ports are among the least efficient and most congested in the world and the recent growth in trade has increased congestion even more. Dwell times are nearly quadruple those of Asian ports, and limited traffic, poor facilities and a lack of maintenance dredging means that large vessels do not call West Africa. Increased port productivity The WAFMAX vessels were specifically designed to overcome the obstacles in West African ports. Every time a WAFMAX vessel calls a West African port, it delivers almost twice the number of containers as other vessels calling the same port, and faster too. That helps bringing down the notoriously long waiting times of West African ports benefitting all vessels servicing the territory and hence also importers and exporters in the region. In addition to reduced waiting time, the WAFMAX vessels' length and improved stability also help reduce berthing time through faster loading and discharge of containers. Since the WAFMAX vessels are responsible for a significant share of the traffic in the ports they call, they have a measurable impact on improving the ports' overall productivity. In Apapa, Nigeria, the WAFMAX ships are for instance expected to lead to a 20% increase in port productivity by 2013.
9 Reduced emissions The WAFMAX vessels also reduce the environmental impacts of container shipping on the West Africa - Far East Asia trade. A combination of lower port turnaround times and slow steaming while vessels are in transit means that a container shipped on a WAFMAX vessel has up to 30 percent lower CO 2 emissions compared to the industry average on the Far East Asia to West Africa trade route. The WAF- MAX vessels also reduce SOx emissions significantly. Enabling trade The improvement in port productivity as a a result of WAFMAX also has an impact on transportation costs for shippers importing to or exporting from the region. The reduced waiting time enabled by WAFMAX means that customers are able to reduce their inventory costs and will incur fewer congestion surcharges as they receive their goods faster. The reduced logistics costs of importing to or exporting from West Africa are expected to generate increased trade and economic activity in West Africa in the years to come. Further information:
10 NORDEN NORDEN has implemented ship performance monitoring systems which streamline the collection of performance indicators in real time and eliminate a number of clerical activities in the office. This allows the company to develop efficiency-enhancing measures, such as right steaming or virtual arrival. These measures result in more efficient fleet management and reduced environmental impacts.
11 NORDEN was founded and listed in 1871 and is one of the oldest shipping companies in the world. NORDEN operates globally in dry cargo and product tankers with one of the most modern and competitive fleets in the industry. NORDEN operates a total of 244,5 vessels. In addition, vessels from 3rd parties are operated in pools of which NOR- DEN which is either co-owner or manages. These are Norient Product Pool, NORDEN Post-Panamax Pool and NORDEN Handysize Pool. NORDEN has its headquarters in Denmark, and offices in Singapore, China, India, the USA and Brazil, a network of port captains as well as site offices at shipyards in Korea, China, Vietnam and Japan. NORDEN has 273 employees on shore and 884 on board owned vessels. In addition, Norient Product Pool has 44 employees at is offices in Denmark, Cyprus, Singapore, the USA and Brazil (numbers are stated the 31st. December 2012). Real time monitoring of ship performance In the tanker business a fast and steady pace is essential, both in the journey to the origin of the cargo as well as delivering it at its destination. That requires high speed resulting in high fuel consumption. Via the Norient Product Pool (NPP), NORDEN engages in several initiatives to enhance efficiency while still being able to satisfy its clients need for timeliness and speed. Efficient operations mean reduced consumption of bunker oil, which translates into lower operating costs and lower CO 2 emissions. NPP has implemented a system known as Master s Operations and Environments Performance System, MOEPS. The system allows for the collection and analysis of information on the organisation of a voyage as well as its actual performance. The system is capable of monitoring a ship s operating parameters, allowing comparison of the agreed service speed with the actual speed of the vessel as an example. If the actual speed exceeds the agreed speed, the head office sends an enquiry to the captain to determine the reasons for the deviation. There may be several reasons why the speed is higher than agreed, such as the weather or the traffic situation at sea. But if the head office determines that there is no reason to steam at high speed, the captain is ordered to reduce it. Total savings between amounted to 245,000 tonnes of bunker oil and 774,200 tonnes of CO 2. Compared to the level of efficiency in 2007, this corresponds to a 24 percent saving approximately. Right steaming and virtual arrival NNP also uses MOEPS for virtual arrival a process that involves an agreement to reduce a vessel s speed on voyage to meet a pre-determined time of arrival. Reasons for reducing speed may also include the discharge port not being ready for the ship. In such a case, if the speed is not reduced the ship may arrive too early and be required to wait idly at anchorage. There would be no benefits from fast steaming as this would not lead to discharging the cargo any faster. If the system alerts the operator that virtual arrival is relevant for a voyage, NPP asks the customer for permission to employ virtual arrival. If the customer agrees, then NPP contacts the Danish Meteorological Institute (DMI) to calcute the virtual arrival speed and arrival date based on relevant weather forecasts. This is communicated to the customer and may have a bearing on the duration of laytime and demurrage. Virtual arrival provides a number of benefits. Firstly, emissions are reduced due to the elimination of emissions while waiting at anchor and steaming at optimised speeds. Secondly, port congestion is reduced and the level of safety improves in port areas. Further information:
12 NORDIC TANKERS Nordic Tankers works towards increasing its safety level which is of key importance in the transport of chemicals by sea. The company undertakes projects addressing organisational processes as well as corporate culture. A high safety level is beneficial for the protection of crew, cargo the general public and the environment. Nordic Tankers operates nearly 130 specialised tankers specifically constructed for carrying chemical substances. These vessels carry hundreds of different chemicals and other liquids, ranging from red wine to concentrated sulphuric acid. Nordic Tankers operates globally, the main regions being US Gulf, Central and South America as well as North West Europe. The company has approximately 1450 employees at sea and 210 ashore at offices in Denmark, France, USA, Colombia, Singapore and Latvia. Implementing a Safety Culture Chemical cargo owners require shipping companies to document high safety standards as a prerequisite for operating in the market. This means that, apart from having sophisticated ships and equipment,
13 shipping companies must design and implement strict safety procedures and sign on specially trained crews. A high safety level is not only beneficial for the protection of crew and cargo, but also translates into greater safety for the general public, especially populations living in port cities and coastal areas close to the routes of chemical tankers. The benefits of high safety levels are also evident regarding the environment. Nordic Tankers has chosen a profile as High Safety Carrier as one of its competitive edges. This requires on-going efforts in terms of specifying detailed safety procedures that are harmonised, planned and transparent for all parts of the work on board and inherent in the culture of crews on-board and staff ashore. To improve safety performance, Nordic Tankers has started a project called Safety Culture. Working with the culture, goes beyond detailed safety procedures, and the aim is to bring safety into the DNA of all employees and bring all Nordic Tankers ships into the top quartile in terms of safety performance. The first step involved a diagnosis of the challenges at Nordic Tankers. The diagnosis revealed that there was room for improvement in the interplay and communication between shore departments and ships, a need for role models and leadership and a need for improved motivation for learning and knowledgesharing. Nordic Tankers will also develop a Code of Conduct that will include policies in matters of safety. The company will educate key personnel at sea and ashore in how to apply the Code in practice so they may act as role models and can coach their colleagues. The last step involves defining responsibilities for project results and incorporating these into job descriptions and appraisal systems. This includes establishing of a rewards and sanctions matrix clarifying consequences of behaviour affecting safety. Measuring improvements Nordic Tankers also work with Key Performance Indicators in a number of areas related to safety. The most important indicator is the number of so-called Lost Time Incidents (LTI s). LTIs are work related incidents resulting in absence from work on a scheduled work shift on the day following the injury. Nordic Tankers has improved its LTI from 1,8 in 2010 to below 0,8 in 2012, and has set a target for further improvement in Further information: Sharing knowledge and defining responsibilities To ensure active engagement from everyone the next steps include communication, a safety leadership training program and knowledge-sharing initiatives. Knowledge-sharing among staff on ships and ashore will include establishing an ideas bank with employees being invited to submit their suggestions for safety improvements.
14 TORM TORM improves safety and environmental performance through training and communication efforts. Better safety and a No blame culture helps prevent accidents and increases job satisfaction and retention among employees. High safety performance also yields more commercial flexibility and thus better earning power. TORM was founded in 1889, is headquartered in Denmark and conducts business worldwide, with offices in India, Philippines, Singapore, USA and Brazil. The company employs approximately 300 people ashore and about 2900 seafarers. TORM is one of the world s largest carriers of refined oil products and also a participant in the dry bulk market. The Company owns 68 vessels and operates a fleet of 125 vessels in cooperation with other shipping companies. Focus on safety and the environment TORM focuses on monitoring and reducing the risk of non-compliance through operational, quality-enhancing initiatives in the areas of health and safety, as well as through actions to mitigate risks of environmental damage. Strict requirements imposed by oil majors give TORM an extra incentive to improve safety performance and increase training efforts. High performance yields more commercial flexibility and thus better earning power. Four levels of training TORM s training programme comprises activities on four levels. The first level of training follows the Standards of Training, Certification & Watch keeping (STCW) convention and flag state requirements, including fundamental safety training, pollution prevention and survival in craft and rescue boats. The second level of training is in accordance with the specific requirements for safety on board tankers. This training is guided by Tanker Management and Self Assessment (TMSA) requirements and includes courses in bridge team management, ship handling, vetting, equipment-specific training and officer seminars. The third level constitutes training in accordance with company needs and requirements for technical, environmental and safety performance. These may include courses in pump systems, engine maintenance and supplier-specific training. The fourth level comprises training directed towards the individual needs and requirements. This training can involve anything from information technology skills, leadership skills, or painting courses. Low number of accidents Lost Time Accident Frequency (LTAF) is a measure of work-related personal injuries that result in more than one day off work per million hours of work. TORM is aiming at minimising its LTAF, recognizing that 'zero' would be the optimal goal. TORM has consistently delivered an average LTAF of 1.0 or below a very competitive level compared to other industries and this performance can be attributed to the safety training programmes.
15 Learning from near misses A 'near miss' is an unplanned event that did not result in injury, illness, or damage but had the potential to do so. A ship without near misses is not necessarily a safe ship and a high number of near miss reports indicate that the crew are aware of safety risks and are responding to them. In 2010, TORM initiated a project aiming at raising awareness about the importance of near miss reports. Between 2009 and 2012, the reporting frequency increased by 841 percent, from an average of 0.6 to 6.1 reports per ship per month. Sharing near miss reports between the vessels has proven to be an effective way of improving the safety culture on board. Along with TORM's No blame culture this approach helps. Further information:
16 The Danish Shipowners' Association Amaliegade Copenhagen K Danish Responsibility means striving for a sustainable future, while building competitive companies and a stronger society. Danish Responsibility is a mindset which ensures that we combine economic growth with responsible behaviour. When social and environmental responsibility is incorporated throughout the supply chain, from design and production to use and disposal, the end result is better products, and better products create a better world. Learn more on
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