Responsible Business

Freight

As a leading global charterer, LDC is committed to the safe, reliable and responsible shipment of agricultural goods, and recognizes the influential role it can play in working toward shipping industry decarbonization.

Although freight is correctly regarded as the least environmentally damaging way to transport goods around the world, shipping emissions still present a huge challenge. Marine diesel exhaust accounts for much of the transport sector’s sulfur oxide (SOx) emissions, and for a significant portion of nitrogen oxide (NOx) and complex particulate matter releases. In addition, marine carbon dioxide (CO2) emissions account for about 2% of global greenhouse gas (GHG) emissions.

In addition, marine carbon dioxide (CO2) emissions account for about 2% of global greenhouse gas (GHG) emissions.  

“As a key facilitator of world trade, representing around 80% of global flows, it is critical that the maritime sector addresses the climate impacts of international shipping activities. Collaboration across the value chain, leveraging new technologies and embracing digitalization are all key to meeting the ongoing challenge to optimize vessel operations and thereby reduce emissions.”

Sebastien Landerretche

Head of Freight

Statistics

The Sea Cargo Charter

In October 2020, LDC became one of the founding signatories of the Sea Cargo Charter, a pioneering multi-stakeholder initiative that aims to champion responsible and sustainable shipping, transparent climate reporting and improved decision-making in line with the policies and decarbonization ambitions adopted by the International Maritime Organization (IMO). 

The Sea Cargo Charter establishes a common baseline for shipping industry leaders to quantitatively assess and disclose shipping activity alignment with climate goals, including an ambition to reduce total annual GHG emissions by at least 50% of 2008 levels by 2050, with a strong emphasis on targeting zero emissions. 

As a signatory, LDC commits to accurately measuring the GHG emissions of its chartering activities. Following stringent guidelines, we will assess our climate alignment relative to established decarbonization trajectories, and report results on an annual basis. We also commit to making compliance with the Sea Cargo Charter contractually part of new chartering activities, working with ship-owners and other partners to meet this requirement.  

This global initiative ultimately promotes carbon-efficient shipping through collaborative action on vessels, either through technical retro-fitting or operational efficiencies. Granular analysis of a ship’s full voyage carbon intensity using the Energy Efficiency Operational Indicator (EEOI) methodology, can potentially lead to optimized decision-making – not only on vessel selection but also on fleet routing. 

We also believe that the globally standardized reporting established by the charter is an essential step toward the effective carbon levy mechanisms that will be necessary on the shipping decarbonization journey. 

Open Close

Improvement Measures

To improve something, we believe you first need to measure it. Accurately.  

Each ship is unique, and we need to understand a vessel’s specificity rather than jump to conclusions based on its size or the year it was manufactured. For this reason, we seek to improve through accurate measurement and analysis of the causation chain impacting each ship’s performance.  

These analysis models will then allow our Trading and Operations teams to select the most efficient way of carrying LDC’s products from origin to destination, with the ultimate goal of reducing LDC’s global environmental footprint. 

Progress toward decarbonization is contingent upon the digitalization journey we have embarked on. Leveraging modern technologies to measure, analyze and improve the performance of our ships, wherever they are in the world at any point in time, will reap huge benefits in terms of understanding where we can make further gains. 

In 2020, we intensified our decarbonization journey by implementing the i4 Insight platform, a digital solution backed by Lloyds RegisterThis project, which should come to fruition in the summer of 2021, leverages modern technologies, such as machine-learning and near real-time data, to build precise, tailored models of our ships’ performance.  

Open Close

Technical and Operational Efficiency

The theory of change teaches us to observe and act first upon our sphere of control and influence. With this in mind, ship operators have the opportunity to reduce the fuel consumption – and therefore the emissions – of the ships they charter, by maximizing technical and operational efficiencies during voyages. 

The theory of change teaches us to observe and act first upon our sphere of control and influence. With this in mind, ship operators have the opportunity to reduce the fuel consumption – and therefore the emissions – of the ships they charter, by maximizing technical and operational efficiencies during voyages. 

Technical efficiency stems either from improved hydrodynamic designs, such as new hull shapes and propeller innovations, or from energy-saving measures like anti-fouling paints, solar panels, wind propulsion devices and air lubrication systems that reduce resistance between the ship’s hull and seawater. Some of these devices or measures can be retrofitted during a vessel’s lifetime and therefore allow ageing conventional ships to transition to attain 2030 emissions’ targets. 

Other fuel efficiency gains relate to the day-to-day operations of a ship: optimal weather routing, speed adjustment and improved navigation, based on a better understanding of sea conditions.  

What do these endeavors have in common? Cooperation between operators and ship-owners and greater use of digitalization through sensor-based measurements and computer modeling.  

At LDC, we are in constant dialogue with ship-owners, engineers and tech-innovative stakeholders as we seek to push the efficiency envelope for the vessels we charter. 

Open Close

Seafarers’ Code of Conduct

The sustainability of a supply chain necessarily includes the welfare of its workers.  

In 2020, around 300,000 seafarers were stranded at sea due to crew-change restrictions as a result of the Covid-19 pandemic, with some crews staying on board for over a year. This led to an industry-wide call for the development of a dedicated code of conduct for shipping value chain actors, recognizing seafarers as key workers and ensuring their rights and wellbeing. 

As part of a joint project launched in November 2020 by the Sustainable Shipping Initiative, the Institute for Human Rights and Business and a working group of other maritime industry participants – LDC among them, this code is now under development and set to be published in June 2021. For it to be effective, collaboration will once again be key; full consultation with ship-owners will be an essential step before global implementation. 

Intended to be more than a statement of good intent, the code will be concrete and actionable, setting out in detail the responsibilities of supply chain actors and how crew members can seek support or initiate a grievance process. 

Ships of the future will rely extensively on our partners at sea, who will be responsible for their data monitoring, sensors, new technology and safety procedures. We believe that proper regard for seafarers’ wellbeing is central to the health, decarbonization and sustainability of our industry. 

Open Close

Looking to the future

In 2020, adoption of new technologies and support for collaborative initiatives such as the Sea Cargo Charter paved the way toward our future. The journey to maritime decarbonization is well under way, as we join forces with others to encourage innovation, wider and more intense cooperation on various forums, and greater engagement with governmental authorities. 

As a matter of urgency, we believe the shipping industry should introduce a global regulatory framework and incentive mechanism, such as a carbon levy, to reduce as far as possible its environmental impact. We also believe any such carbon levy should be introduced as a global standard, ideally governed by the IMO, to ensure the shipping industry’s transformation is underpinned by fair and harmonized global regulation. 

Collaboration with government authorities in the world’s main shipping hubs – like Switzerland and Singapore – is also key to spearhead bold ambitions for decarbonization and persuade the IMO to turn a concrete carbon levy program into a global legal obligation. 

With growing scrutiny over climate issues from the public, financiers and governments themselves, who are setting bold new targets, obtaining decisive diplomatic support at the IMO for such a program remains an urgent priority for the coming months, to ensu re a fair and sustainable future for the industry. 

Targets

Contribute to ongoing SSI studies on ships of the future

Completion: 2020

Status: Complete

Reduce our fleet emissions per ton-mile by 15%, compared to 2017

15%

Completion: 2022

Status: In progress, on target