IFC Initiative Spearheads Interferry Forum’s Review of Future

(Press Release)
Friday, August 24, 2012

The International Finance Corporation (IFC) – part of the World Bank Group that provides development loans to poor nations - is poised to support the ferry industry for the first time after asking trade association Interferry to help identify deserving countries and operators.

The initiative will be explained at Interferry’s 37th annual conference in Dubai from October 21-24, which will also feature dramatic insights from power solutions giant Wärtsilä on how a fast-changing world could impact on shipping by the year 2030.

IFC interest in the ferry sector was prompted by the ongoing IMO/Interferry joint programme to improve ferry safety in developing nations.  The Washington DC-based organisation – which focuses on private sector financing - is now assessing potential investment projects after approaching Interferry CEO Len Roueche for a report on operators in emerging markets with a strong commitment to safety. 

“Ferry safety as such is not the IFC’s primary objective but any modernisation funding would certainly help the cause,” says Roueche.  “As a result, we could be involved on two fronts, with the IMO helping governments to enforce regulations while the IFC works with individual operators.”    

The IFC’s latest aims will be outlined in a dedicated conference session by Harsh Gupta, senior investment officer in the global transport team.  Transport projects account for some 24% of the IFC’s current US$12 billion infrastructure portfolio and range from shipping and ports to airlines, airports, roads and railways. 

Ships with no names...
Another glimpse into the future will be provided by Wärtsilä’s Arnauld Filancia, communications director Middle East/Asia, with three varying scenarios for 2030 based on intensive research, interviews and workshops. 

His paper will reveal only two certainties – that shipping remains part of the transport matrix and that water becomes even more valuable – in contrast to six uncertainties on issues such as trade and economic growth, climate change and sustainability, scarcity and control of power.  Analysis and combination of the different outcomes yielded three plausible scenarios.


In Rough Seas, scarce energy, water and food have become a source of power and bilateral agreements have overtaken free markets.  New trade routes have emerged due to the increase in cartels and industries moving to resource-rich areas.  GDP growth is limited and unevenly distributed, resulting in tension and increased demand for armed escorts, while further friction is caused by the Arctic routes - now mostly open due to global warming.  Climate change is seen as a threat, not an opportunity, but only local and regional solutions are in place. 

The entire logistics chain is optimised regionally, including the use of smaller ships.  Fleets are partly nationalised, flags of convenience have disappeared and oil tankers give way to LNG carriers.  The changed goods flow – including increased transport of water and agricultural products - has reduced container traffic and some major terminals have closed. 

In Yellow River, China dominates the global arena economically and geopolitically but labour-reliant and resource-intensive manufacturing has moved to Africa and other Asian countries.  China’s affluent coastal megacities are major customers for the finished goods, while living standards in Africa rise rapidly under Chinese-style governance models.  Economic growth is significantly slower in the western economies.

Most big shipping companies are Chinese-owned and trade routes have shifted according to Chinese interests. New ports are being built in Africa, Eastern Russia and India, while Chinese ports have become sophisticated, integrated logistics centres.  Towards 2030, the Chinese economy is overheating, the income gap widens, growth slows down and scarcity of water and food is of increasing concern.

In the third scenario, Open Oceans is a strongly globalised world where mega-corporations drive GDP growth under favourable government conditions and regions have gained power over nation states.  After a decade of economic downturn from 2008, governments line up behind a liberalised global market doctrine and also unite on climate issues. 

Integrated large scale logistics systems are king and ships with no names are simply tools in the process.  Ultra-efficient, automated ports near the megacities process shipments at high speeds.   Environmental challenges lead to new vessel types including desalination, waste management and recycling ships anchored outside megacities.  Renewable energy is a top priority but oil, coal and other fuels are shipped into regions where renewables are difficult to generate.


Practical issues
Other conference sessions will focus on the regulatory, technical and commercial issues affecting the ferry industry’s more immediate future.   

The keynote address will be a review of evolving ‘green’ regulations by IMO Marine Environment Protection Committee chairman Andreas Chrysostomou, while the implications of the Costa Concordia incident will be explored by special guest speaker Charles ‘Bud’ Darr, VP of technical and regulatory affairs at the Cruise Lines International Association. 

Safety and environmental themes will be developed in papers on ship design innovation and alternate fuels.  Revenue-boosting initiatives under discussion will include case studies from IT specialists and shipowners on the benefits of integrated reservations, price management and intermodality systems.

Interferry is on track for another record attendance after event hosts the Dubai Roads & Transport Authority offered a half-price fees subsidy for the first 250 delegates to register.  Two months ahead of the conference, almost 200 early bookers had responded.  The event attracts many of the industry’s most senior decision makers and final attendance is expected to reach 300.  Full details are at www.interferry.com  
 

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