Pacific Basin: tramp trades must wait for green technologies to filter through

After nine years in the role, Mats Berglund announced last January that he was stepping down from his role as head of one of Hong Kong’s largest shipping companies at the end of July, joining a growing exodus of expats from the Special Administrative Region.

Berglund, 57, will return home to Sweden after stepping down as CEO of Hong Kong-listed Pacific Basin, with Ultragas CEO Martin Fruergaard set to take the reins of the dry bulk giant.

As he prepares to step down, Berglund, always vocal on the most important issues in shipping, has had plenty of time to ponder the debate over future fuels.

Pacific Basin, a member of the Getting to Zero coalition, has been keeping tabs on all the new technologies and fuels coming to market, but it’s the company’s specific trades in convenient bulk to supra that will likely mean that she will need to be patient for any big green breakthrough to spread to her level.

“I think it will be many years before this new technology is both practically and commercially viable for tankers and bulk carriers, because you also have to develop the bunker infrastructure,” Berglund said. maritime CEO.

Prototype ships with new fuels will be ready in 2024 and 2025, Berglund says, but they are likely to operate on a few fixed routes where refueling infrastructure will be available, which is easier for ferries and ocean liners to organize.

The greatest volume of ships for the tramp sectors requiring a global supply infrastructure could occur within eight to 10 years, estimates the boss of the Pacific basin.

In the meantime, to reduce emissions from shipping, Berglund is asking for optimization and fuel saving devices on existing ships, while investing in carbon credits, but above all on its agenda, speeds slower.

“Slower speed is a win-win – better for the environment and better for the market,” said Berglund, pointing out that the International Maritime Organization (IMO) will force slower speeds with its index measurements. carbon intensity from 2023.

“After a decade of weak markets, we need to make money now so that we can afford the new technology ships that will be much more expensive and consume much more fuel,” Berglund said.

The other takeaway from the Swede is that it is impossible to even think of ordering a new ship today with an oil engine.

“You would have to depreciate it over 10 to 15 years instead of the traditional 25 years, which would make it financially impossible,” says Berglund, advising that it is far better to buy a used vessel for half the price with much the same technology, improve it a bit and earn money from it, it will be more than depreciated long before 2030.

This article first appeared in Maritime CEO magazine, published this week. Splash readers can access the full magazine by click here.