UN global supply chain forum

Source: UNCTAD

Disclaimer: Copyright infringement not intended.

Context:

UN global supply chain forum calls for resilience amid world trade disruptions.

Details

• Barbados and UN Trade and Development inaugurated the forum amidst a volatile global trade landscape.

Global disruptions and supply chain vulnerability

• Global disruptions are causing ships to spend more days at sea and emit higher levels of greenhouse gases, highlighting the growing unreliability and uncertainty of our interconnected world.
• Against this backdrop, UN Trade and Development Secretary-General Rebeca Grynspan spotlighted the urgent need to make global production and distribution networks more inclusive, sustainable, and resilient.

Participants

• The Trade and Transport Ministers from Barbados, Curacao, Fiji, Guyana, Marshall Islands, Seychelles, and Tuvalu.
• Representatives of UN agencies such as the International Maritime Organization, the International Labour Organization, the UN Industrial Development Organization, UN Global Compact, development banks, representatives of major ports, such as the Port of Seattle, as well as leaders from the shipping industry, port authorities, and the Panama Canal participated.

Context of urgency

• The forum addressed the compounded effects of climate change, geopolitical tensions, and the COVID-19 pandemic on global supply chains.
• Ports play a crucial role in maintaining global value chains through technology and sustainable practices.
• Secretary-General Grynspan highlighted the importance of ports remaining part of global value chains through technology and adaptation, showcasing Barbados as an example for other small island developing states (SIDS) in implementing sustainable practices.

Decarbonizing global shipping

Complexities and Opportunities in Developing Countries

Harnessing Renewable Energy Resources:

• Developing countries with abundant renewable energy resources, such as solar and wind, have the potential to lead in the production of green fuels like hydrogen and ammonia.

Economic and Infrastructure Challenges:

• Developing countries face economic constraints and infrastructural limitations that can hinder the transition to low-carbon shipping.

International Collaboration and Support:

• Developed countries should provide financial aid, technological support, and knowledge transfer to assist developing nations in their decarbonization journey.

Role of Ports in the Transformation

Incentivizing Low- or Zero-Carbon Fuels:

• Ports can offer incentives such as reduced port fees or priority berthing for ships that use cleaner fuels.
• These incentives can encourage the shipping industry to adopt low- or zero-carbon fuels more rapidly.

Establishing Safety Frameworks:

• With the introduction of new fuels like hydrogen and ammonia, ports must implement robust safety protocols.
• Ensuring safe handling and bunkering operations is critical to prevent accidents and environmental hazards.

Developing Port Readiness Assessment Tools:

• Creating tools to assess and enhance a port's readiness to handle various low-carbon fuels is essential.
• This includes infrastructure upgrades, staff training, and emergency preparedness to ensure ports can safely manage new fuel types.

Launch of the "Manifesto for Intermodal, Low-Carbon, Efficient and Resilient Freight Transport and Logistics"

Transitioning to Zero-Emission Fuels:

• The manifesto calls for the adoption of zero-emission fuels such as green hydrogen, biofuels, and synthetic fuels.

Optimizing Logistics Systems:

• Digital technologies, better route planning, and efficient cargo handling are key components of optimized logistics systems.

Creating Sustainable Value Chains:

• Every link in the supply chain must adopt sustainable practices, from raw material extraction to final delivery.

Goals

Meeting Global Climate Targets: The overarching goal is to keep global warming below 1.5°C, in line with the Paris Agreement. Decarbonizing global shipping is a critical component of achieving this target.

Strategic Focus on SIDS (Small Island Developing States)

• Heightened Risks from Climate Change: SIDS face increased risks from climate change impacts on transport infrastructure, placing transport and logistics at the forefront of their development priorities.
• Improving Connectivity: These countries must enhance connectivity within and between their nations and to regional and global markets through strategic investments in maritime and air transport infrastructure, efficient multimodal transport networks, and streamlined customs and administrative procedures.
• Transition to Green Technologies: SIDS advocate for adopting green and sustainable technologies in maritime transport to promote energy efficiency and combat marine pollution.
• International Financial Support: SIDS call for international financial institutions, development banks, and donor countries to prioritize funding and investment in their transport and logistics sector, focusing on projects that promote resilience, sustainability, and inclusivity.

Digital Solutions for Resilience

• Strengthening Supply Chain Resilience: Digital technologies are key to enhancing global supply chain resilience.
• Innovations in Trade Facilitation: Blockchain-enabled traceability mechanisms and advanced customs automation systems are indispensable for optimizing trade facilitation processes, enhancing transparency, and mitigating operational risks.
• Guidelines for Electronic Single Window: UN Trade and Development presented guidelines for developing an electronic single window for trade.
• Importance of Collaboration and Digitalization: Industry voices emphasize collaboration and digitalization in the maritime sector, urging ports to become intermodal hubs integrating energy and digital capabilities.

Trade-and-Transport Dataset

• Launch and Coverage: The UN Trade and Development, in collaboration with the World Bank, launched a groundbreaking Trade-and-Transport Dataset, covering all countries and trading partners with data on over 100 commodities and various transport modes.
• Holistic View of Trade: The dataset offers a comprehensive view of trade, including modes of transport and associated costs.
• Accessibility and Impact: Accessible for free, the dataset is expected to contribute significantly to better understanding and optimizing global trade flows, and improving evidence-based policymaking.

Innovation and Youth Collaboration

• Inspiring Innovative Solutions: Aimed at making global supply chains greener, more efficient, and resilient, almost 80 candidatures from around the world presented projects on renewable energy, agriculture, medical technology, sustainable development, climate action, and peacebuilding.

Collaboration and the Road to Saudi Arabia 2026

• Memorandum of Understanding: UN Trade and Development and the China Council for the Promotion of International Trade (CCPIT) signed a Memorandum of Understanding to expand collaboration in trade and investment promotion, trade facilitation, supply chain-themed exhibitions, public-private dialogues, business matchmaking events, and exchanges between experts, scholars, and think tanks.
• Strengthening Supply Chains and SIDS Resilience: The forum's outcomes are expected to strengthen global supply chains and the resilience of SIDS. The Kingdom of Saudi Arabia will host the second forum in 2026.

United Nations Conference on Trade and Development (UNCTAD) The United Nations Conference on Trade and Development (UNCTAD) is the UN’s leading institution dealing with trade and development. It is a permanent intergovernmental body established by the United Nations General Assembly in 1964. HQ:Geneva, Switzerland UNCTAD supports developing countries to access the benefits of a globalized economy more fairly and effectively. It provides economic and trade analysis, facilitates consensus-building and offer technical assistance to help developing countries use trade, investment, finance and technology for inclusive and sustainable development.

Conclusion

Decarbonizing global shipping is a multifaceted challenge that requires concerted efforts from all stakeholders, particularly ports and developing countries with renewable energy potential. The launch of the "Manifesto for Intermodal, Low-Carbon, Efficient and Resilient Freight Transport and Logistics" marks a significant step towards this transformation, emphasizing the need for immediate action to meet climate targets and ensure sustainable and resilient global trade.

The Impact of Shipping on Climate Change Impact on Climate Change Emissions: Shipping is responsible for approximately 3% of global greenhouse gas (GHG) emissions, similar to aviation. Location of Emissions: Most emissions occur on the open seas, beyond national borders, requiring regional and international efforts for mitigation. International Maritime Organization (IMO) Actions Climate Strategy (July 2023): The IMO targets net-zero GHG emissions by 2050, with interim goals of reducing emissions by 20%-30% by 2030 and 70%-80% by 2040, compared to 2008 levels. Implementation: Despite these targets, the IMO has yet to adopt measures compatible with the Paris Agreement's temperature goals. Energy Efficiency Design Index (EEDI) Introduction: Approved in 2011 and enforced in 2013, the EEDI sets global standards for new ship energy efficiency. Phases and Improvement Targets: Phase I (2015-2019): 10% improvement. Phase II (2020-2024): 15%-20% improvement depending on ship type. Phase III (2025 onward): 30% improvement. Current Performance: Many new ships already exceed the 2025 targets, often due to economic factors rather than EEDI regulations. Ship Design Efficiency Historical Trends: Ships built in the early 2000s were, on average, 10% less fuel-efficient than those from the 1990s. Current Status: Since 2013, the design efficiency of ships has improved, although driven by market conditions more than EEDI requirements. Slow Steaming Definition: Reducing ship speed to save fuel and reduce emissions. Impact: A 10% reduction in speed can lead to a 27% reduction in emissions. A 20% speed reduction has significant environmental benefits. Feasibility: Technically possible and enforceable using the Automatic Identification System (AIS), already mandatory on large ships. Liquid Natural Gas (LNG) as an Alternative Fuel Environmental Benefits: LNG can reduce SOx emissions by 100% and NOx emissions by 90% compared to heavy fuel oil (HFO). GHG Impact: LNG can reduce GHG emissions by up to 10% compared to diesel, but this is dependent on low methane leakage. Higher leakage rates could negate these benefits, making LNG less favorable than marine gas oil (MGO).

Sources:

ThePrint

PRACTICE QUESTION Q. The port of Bridgetown located in which country? A. Fiji B. Barbados C. Seychelles D. Tuvalu Answer B