Caroline Yang, by anyone’s standard, is a busy woman. She is the CEO of Hong Lam Marine, a Singapore ship owner, which owns, operates and manages its own fleet of 33 vessels. She also is the president of the Singapore Shipping Association [SSA], a national trade association in one of the world’s most important and dynamic maritime hubs. She shares insight on her dual positions and the many challenges facing shipowners today.
Hong Lam Marine started in 1981 with two steel tankers and today it owns about 33 vessels, with a fleet operating within Singapore and Tanjong Pelepas (Malaysia), supplying bunkers to ships calling into Singapore port and Tanjong Pelepas.
“We have another fleet that operates mainly in South East Asia. We own, operate and manage our own tankers,” said Yang. “We do not, however take positions in the bunkers, and therefore are mainly a logistics provider. We have about 150 people on shore and about 750 crew on the ships.”
The energy transition will most assuredly impact Hong Lam Marine, as Singapore has been the top bunkering port in the world since 1988, with the port of Singapore supplying more than 50 million tons of fuels in 2023 alone. As with most owners eyeing a diverse fuel future, it is a classic ‘chicken and egg’ conundrum, balancing the availability of alternative fuel technology with the ready availability of ‘green’ fuels.
“We are at a strategic geographical location for ships to refuel, and the bunkering eco-system is entrenched with a strong infrastructure (terminals, traders, suppliers, brokers, etc.),” said Yang. “So if there is a change in the type of fuels to be delivered, we will have to be part of this equation and be ready for the change ... [but] the main question is timing.” Timing in the maritime space is unique given the relatively long gestation to design and build a ship, not to mention its long lifespan.
“Build too early and you [run the] risk of a stranded asset, the new builds are expensive,” said Yang. “You need all hands on deck to support this: the owners, charterers, bankers and even the governments all need to have a skin in this decarbonization journey.” In her view, the bunkering sector has “a delayed effect,” in the sense that as you service the ship owners, you keep your eye firmly on the trending of the types of new fueled ships that are being built, the pricing on the different types of fuels and the availability of supply of the fuels. “The next challenge is the safety and competency of the seafarers to handle safely the operations of these new fuels,” said Yang. “We already have a shortage of seafarers, and this will be a challenge that requires the unions, government and industry to work together.”
Investing in the Future
“We will have to invest in new ships and invest in the up-skilling and re-skilling of the crew,” said Yang, as she eyes the multitude of big changes circulating through the industry. “We are constantly in discussions with our charterers to hopefully build the right ships at the right time. We are involved with many studies and consortiums to study the operations of methanol bunkering and ammonia bunkering. For example: in July 2023, Hong Lam Marine, together with Maersk and Maritime and Port Authority of Singapore, conducted the first in the world ship to containership methanol bunkering of 300 tons of green methanol.” Hong Lam Marine also completed a study on the building of an ammonia bunker tanker, together with Pax Ocean and BV.
Part of the investment in the future transcends technology and includes attracting and retaining qualified crews. “The whole world is facing this challenge, as seafaring requires sacrifices: a long time away from home with patchy internet access at times and hard work,” said Yang. Added to the stress is less shore leave premised on security concerns and commercial pressure for quick port turnarounds. But Yang is an optimist, and she believes finding and keeping the talent you need comes down to the basics. “Treating our seafarers fairly in terms of wages; making sure that the rotation is certain for the crew, meaning no overstay on board the ship (without good reason); providing clarity of the various career paths, because there are amazing career paths from ship to shore for many positions. Most importantly, making sure that your ship is properly built, well-maintained and you have safety systems to protect the life and limb of each and every seafarer – underpinned by value of care for people.”
Singapore Shipping Association (SSA) is a national trade association formed in 1985, today with a membership of 500 organizations, representing a broad array of shipping companies and other businesses allied to the shipping industry, including technology start-ups, to promote the maritime industry’s digitalization push. Like most in the maritime space, SSA and its membership are focused on the evolving industry, driven by environmental concerns. “Our top three priorities this year are decarbonization, digitalization and workforce development and training,” said Yang.
• SSA & Decarbonization
The need to reduce carbon emissions, improve energy efficiency, and adopt cleaner fuels are the current hurdles for the shipping industry, as the IMO goals for ships evolve toward to have net zero GHG emissions by 2050. “Operating in a future fuel ready Port of Singapore will play a vital role in our industry’s transition to low to zero emission fuels and SSA works closely with our port authorities and other related maritime organizations to relay our members’ concerns, participate in trials and lend our expertise in workgroup discussions on new safety standards,” said Yang. SSA also organizes forums to support members’ efforts to comply with environmental regulations and adopt sustainable practices. For example, SSA rolled out the “Operating a sustainable shipping business” workshop for members to better understand ESG reporting in the maritime context. The newly inaugurated Decarbonization Committee was set up to help the Singapore harbor craft industry pivot towards sustainable practices, in order for all new harbor craft operating in the port from 2030 onwards to be fully electric, capable of using B100 biofuel or be compatible with net zero fuels.
“Shipowners and operators are grappling with the adoption of decarbonization technologies such as alternative fuels, emission reduction technologies, and exploring alternative propulsion systems (e.g., wind-assisted propulsion, electric propulsion),” said Yang. “The technical feasibility, scalability, and economic viability of these technologies pose significant challenges for implementation.”
SSA and its membership are working to leverage digitalization and all that it has to offer in the name of efficiency, while keeping guard up on the potential pitfalls, namely cyber hacks. “The digitalization of maritime operations is transforming the industry, with a growing emphasis on data-driven decision-making, automation, and connectivity,” said Yang. “Shipowners and operators are investing in digital technologies such as Internet of Things (IoT) devices, sensors, and onboard systems to optimize vessel performance, enhance safety, and improve operational efficiency.”
On the cyber security front, SSA is “devoting resources to address cybersecurity challenges within the maritime industry,” Yang said, “because as shipboard systems become increasingly digitalized, maritime enterprises will be more vulnerable to cyber risks. By offering self-assessment tools and benchmarking data, the SSA enables its members to evaluate their cybersecurity readiness and identify areas for improvement. By Q2 2024, our members will be able use SSA’s cybersecurity maturity scorecard, tailor made for ship owners and operators to access industry-wide benchmarking data and self-assess their cyber maturity.”
• Freedom of Navigation
“Shipowners are concerned about the safety and security of their crew members and vessels navigating through geopolitical hotspots and areas prone to security threats,” said Yang, noting that recent activities have inspired an uptick in piracy concerns in the waters off of Somalia.
“The indiscriminate firing of drones and rockets toward commercial ships, as seen in the Red Sea, raises concerns about the potential for direct attacks on vessels and the safety of crew members onboard.”
As traditional trade routes have been disrupted, shipowners have seen costs and delays soar, from being forced to take longer routes around Africa, to the delays in ports and shortages of bunker fuel in West African ports due to the unplanned ship and cargo movement, to increased insurance premiums for vessels operating in the area.
Through it all, SSA stands ready to support its membership base. “Organizing training programs, workshops, and seminars on maritime security and crisis management can help enhance the preparedness of shipowners and their crews to respond effectively to security threats and emergencies,” said Yang. “SSA collaborates with maritime security experts, government agencies, and industry partners to develop comprehensive training modules tailored to the needs of commercial shipping, such as SSA’s organization of a webinar entitled “Navigating the Red Sea: A Comprehensive Analysis of Maritime Security.”
As published in the May 2024 edition of Maritime Reporter & Engineering News.
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