As bulker rates rise, seasoned market sources are describing 2021 as “just like 2006” — the year before momentum in the cycle really hit its stride. With spot rates at some of the highest levels in at least 11 years, it could be easy to forget the world has been enduring a pandemic for more than 18 months. Uncertainty and work stoppages depressed bulker markets in mid-2020, but all that pent-up demand unwound this year. An inefficient market in which many vessels are stuck for long periods in port congestion or quarantine is the result of Covid-19.

Peter Sand, Bimco’s chief shipping analyst, thinks it is impossible to compare the world before Covid with what we see today. “What Covid has done to the market more than anything is make it operate in a very inefficient manner,” he tells TW+. “Floating quarantines, geopolitical disputes disrupting trade lanes and all growth happening in the Far East, which has been jam-packed with handysizes and supramaxes for all of 2021.” The shifts in shipping and commodity markets may feel tectonic, but it would be easy to be mistaken, according to Sand. “I think the talk of a commodities super-cycle spooked a lot of people, most of them with little knowledge of shipping. The inflation in freight rates that followed on from the inflation in commodity prices was much welcome. But it must not be translated into someone thinking this is a new dry-bulk super cycle — because it’s not.” The last “true” commodity super-cycle was during the heady days of 2007 and 2008, when bulker markets peaked, powered by China’s infrastructure buildout and the demand for ferrous-complex commodities that it entailed.

Chinese hunger for iron ore and other commodities has been strong since 2020, driving its industrial production and economic growth. Bulker rates this year have risen to levels not seen in more than a decade. Imports of iron ore to China totaled 620 MMT in the second half of 2020, up by 38 MMT from a year earlier, according to Kpler. Reid l’Anson, an economist for Kpler in Houston, thinks that will change in the longer term — and believes 2020 was sown with clues as to why. “Plateauing Chinese growth helps to explain the recent degradation in iron prices, though with offtakes finishing down year on year in each of the past three months, ending in August. [It is] a sign that another strong second half [2021] of import growth is unlikely,” he says. “A similar trend was true of copper, which has rebounded on robust demand out of China, helping to push prices to multi-year highs. But it should be noted that copper prices have managed to maintain at relatively elevated levels despite recent Chinese weakness. The reason for this largely has to do with distinct supply-side constraints over the long run, as well as a brighter future, given the likely buildout in green infrastructure in the West.” This delineation is important. “Dry bulk commodities that are less reliant on Chinese growth (ie, those that could see a large pick-up in demand on Western renewables infrastructure spending) face a … more positive outlook relative to those — iron ore, coking coal — that are highly dependent on Chinese consumption,” l’Anson explains. “Moving beyond copper … more specialized minerals, like cobalt and lithium, are likely to enjoy a positive future, whereas commodities like thermal coal face a far more uncertain future, given dwindling sources of demand growth.” India and China are likely to be the main drivers in demand for thermal coal, he adds.

Covid has also made the world a more cautious place, especially with respect to government policy. Now major importers and national governments are planning to mitigate against other potential shocks. One of which could be food supply. Food prices were relatively unaffected by the pandemic at the global level last year, despite announcements of policy restrictions early on and some supply chain disruptions. But food prices crept up towards the end of the year due to lower edible oil production and a weakening US dollar, according to the World Bank. South Asia, sub-Saharan Africa and Latin America were among the worst-affected regions. The World Bank expects the pandemic to cause a rise in food insecurity and malnutrition. It estimates that an additional 130m people will face chronic hunger and malnutrition because of the economic impacts of Covid-19. Already, major economies such as Japan and Russia are adjusting policy to mitigate potential shortages in food supplies and commodities. Markets are well supplied for the time being, and although food commodity prices have risen sharply in 2021, they are expected to stabilize in the next 12 months or so. But as the world ponders how to secure its food supply chains, prices for agricultural products and fertilizer — as well as freight rates for the bulkers that carry these commodities — are expected to remain high.

Tom McIvor, a phosphates specialist at commodities markets analysis house CRU Group, tells TW+ the pandemic had a limited immediate impact on grains and fertilizer demand, but the effects are still shaking out. “As essential commodities, governments prioritized these products and only a few countries were impacted, mainly in the first lockdowns, with Hubei phosphates production hit at the beginning of the pandemic and supply from phosphate rock mines in Peru halted in the second quarter 2020 on the surge in cases there,” he says. Extra government support for agricultural producers, stockpiling and weather concerns last year caused crop prices to “skyrocket” and fertilizer affordability reached its most attractive level on record in late 2020, according to McIvor. Consequently, suppliers of grains and fertilizer were able to adapt to the “new world” of Covid-19 and its extra costs and checks by the beginning of this year. But the pandemic has deeply affected logistics and created inefficiencies in supply chains. Freight rates and highly favorable crop prices are expected to remain over the next 12 months or so, helping keep fertilizer prices high, McIvor says. “After that, it’s hard to say whether there will be any lasting impacts from Covid-19 on the agricultural and fertilizers markets. I suspect not, as demand/supply remain the main drivers — the global fleet increases, and the supply chain adapts.”

Sand and Russell Thompson, managing director of trade data platform Tradeviews, agree there is no “new normal” for shipping after Covid, simply a world that has its complexities exposed for all to see. “I find the term ‘the next normal’ somewhat more appropriate, as any new steady-state normality will not be found,” Sand argues. “But what is common for all of the coming normal: more geopolitical aspects will generate volatility (positive for freight rates), coal trading will change (negative for freight rates), tighter regulation on emissions from shipping (positive for some, negative for others).” Thompson thinks the situation is still evolving and it is unclear whether it will ever end, or whether human activity will simply adapt. “The greatest long-term impact we have to manage is the start of a decarbonization process, which will reshape our ships and the cargoes we carry,” he says. “The pandemic has shown us as a species we can adapt and therefore the wheels of change seem to be moving faster.” The same is true for shipping markets, according to Thompson: “It’s always impressed me how robust dry-cargo shipping has been, due to the diverse cargo groups. “The main segments — energy, agriculture, manufacturing, and construction — have different drivers and have moved at a different pace throughout the pandemic. If one falls, the others compensate. This is because the way the world operates has changed. So, while the service economy suffered, the physical economy boomed as people have excess cash to spend and governments have employed stimulus measures into physical projects. As a result, dry bulk owners have had a once-in-a-decade profit bonanza.” In Thompson’s view, the pandemic has exposed the complicated nexus of factors in which shipping is entangled. “Covid has also shown us that freight-rate drivers were more complicated than we imagined,” he says. “For example, commodity price changes have influenced trader activity, pushing up the market, while inefficiencies in crewing and scheduling created tighter markets. Not everything is about classical supply and demand.”

Port operations in key southern Chinese shipping hubs have been suspended as Tropical Cyclone Kompasu edged closer. The storm, which is about 500 km (310 miles) southeast of Hong Kong, is expected to move west across the northern part of the South China sea and make landfall in China’s Hainan province on October 13.

The Yantian International Container Terminal, a major export facility in Shenzhen, said in customer advisory that it has halted all container pickup and delivery services. Similar announcements were issued by the city’s other large terminals in Shekou, Chiwan and Mawan.

In Hong Kong, the local observatory issued a No.8 typhoon warning signal, a level at which terminal operators should stop operations. Hongkong International Terminals, part of Hutchison Ports, said gate operations have ceased due to the looming Kompasu.

Terminal gates will also close at the port of Nansha in Guangzhou in the evening today. Coastal ports in the southeast part of China are no stranger to the visits of heavy storms each year, which normally leads to some delays to vessel schedules. Ports along the southern coastline in Guandong province, including Yantian, had already been disrupted by Typhoon Cempaka in July. That was followed by the hit from Typhoon In-fa and Typhoon Chanthu on the upper part of the country, including Shanghai and Ningbo, earlier this year.

The disruption, nevertheless, has rubbed salt into the wound of an already badly stretched global supply chain, with unprecedented port congestion and logistics bottlenecks triggered by the coronavirus pandemic.

Dry bulk shipowners are not rushing to the yards to order new tonnage, despite enjoying a booming sector in which spot rates have doubled in the past month. They are instead looking to secondhand ships for asset play to remain nimble in the sales-and-purchase market while waiting for pending environmental regulations to take hold. “If you buy a secondhand ship — maybe you made a booboo maybe you feel uncomfortable with it — you go into the secondhand market and you get rid of it,” Goodbulk chief executive John Michael Radziwill said. “With the newbuilding, you’re like a deer in front of headlights.”

Secondhand ships allow owners to fix a secondhand vessel at $40,000 per day right now instead of waiting two years to get maybe $15,000 per day on a newbuilding order, he said. “You have tons of optionality,” he said on Tuesday as a panelist for a talk on dry bulk shipping at Capital Link’s 13th annual New York Maritime Forum. The three-day conference is being held online to Thursday afternoon for Covid-19 safety. “I see no reason to oversupply our market,” he said. “The reason why we’re in this place is because we had restrained on newbuilding orders, so don’t go out and make the same mistake now.”

Spot rates for capesize bulkers have reached highs unseen since 2008 amid a perfect storm of low supply, high demand, and supply-chain disruption. The capesize 5TC, a spot-rate average weighted across five key routes, fell 3.9% to $79,535 on Tuesday, according to Baltic Exchange data. That is still almost double what it was a month ago at $40,518 per day on 8 September. Owners should hold off on ordering new tonnage since regulations will probably require zero-emission ships by 2050, said Gary Vogel, chief executive of Eagle Bulk Shipping. “I think every newbuilding decision is a decarbonization opportunity,” he said. “Waiting and understanding what’s available in terms of zero-emission ships in just a couple of years I think is a huge opportunity, and I think we all should focus on that opportunity.”

In the meantime, owners should minimize carbon emissions from secondhand ships through slow steaming and other measures, said Martyn Wade, chief executive of Grindrod Shipping. “It doesn’t make any sense at the moment to speed up,” he said. “Demand is there, and we are satisfying the demand in the best way we can.”

Seanergy Maritime Holdings, a pureplay capesize owner, has invested $160m this year on six secondhand ships while selling one ship to expand its fleet to 16 capesizes. Chief executive Stamatis Tsantanis said his company is waiting to see new advancements in carbon reduction before it starts committing to newbuilding orders. “Once we have clarity on what’s going to be the technology of tomorrow and what’s going to be the prevailing ship — the model of which we still don’t feel comfortable as a company —then we can consider on the basis of financial returns if that makes sense or not,” he said.

Clarksons Research is forecasting a continuing rebound for shipping from the pandemic in 2022. The research arm of UK shipbroker Clarksons believes the ongoing recovery will be uneven, but port congestion will still be a feature next year. Steve Gordon, managing director of Clarksons Research, said: “The encouraging recovery in shipping markets we profiled six months ago has since developed into a remarkably strong year, driven by rebounding volumes and widespread logistical disruption.”

Reflecting this, the company’s cross-sector ship earnings index ClarkSea has risen sharply, averaging $23,943 per day between January and August, up 55% from 2020. By September, the index had reached $38,944 per day, in the top 2% of all values recorded over the last 30 years. There has been a strong economic recovery from Covid-19 plus $16trn of global stimulus, of which perhaps two-thirds has been spent, the company believes. Total seaborne trade has already returned to pre-Covid levels, with growth of 3.9% to 12bn tonnes (4.4% in tonne-miles terms) forecast for 2021.

Containerships, bulkers, and gas carriers have seen the strongest performance, but the oil trade remains down 10% from before the pandemic and may not hit pre-Covid levels until late 2022. “While risks remain from Covid-19 outbreaks, ‘cooling’ trends in China’s industrial sector and increased taxation, the trade outlook seems broadly healthy,” according to the Clarksons Research report. Cargo growth should hit 3.2% in 2022, to reach 12.4bn tonnes, the company forecasts.

Congestion at ports is now estimated to be absorbing an additional 4% of the containership fleet and 3% of bulker capacity. In the short term at least, continued “bottlenecks” are likely, Clarksons Research argues. The containership market has seen all-time high freight and charter rates and the short-term outlook is firm, Clarksons Research said. One possible downside is an eventual easing of congestion, and the orderbook schedule is heavier from 2023 on. Bulker earnings have risen to their highest levels for 13 years and Clarksons Research’s supply/demand projections are still positive.

After last winter’s spike, LNG carriers have seen encouraging developments and the company expects a strong winter, while the LPG sector has been better than expected but more volatile. Car carriers are seeing good rate gains, with congestion again a factor. Offshore oil and gas vessel prospects are improving slightly, and offshore wind remains very positive, the report says. However, with floating storage having unwound and trade down, tanker markets have been very weak, and any immediate improvements are likely to be modest, Gordon said.

Shipping supply growth remains below trend, with the orderbook limited at 9% of fleet capacity. In 2008 this figure was more than 50%. Fleet capacity is projected to grow by a moderate 3.1% in 2021 and 1.9% in 2022 to reach 1.5bn gt, Clarksons Research said. “With the recovery from Covid-19 continuing and disruption likely to take time to unwind, market sentiment remains positive,” Gordon concluded.

“While risks remain and progress may be uneven, the improving economy, limited orderbook in many sectors and the green transition seem supportive tailwinds for the moment,” he added.

Asset prices for dry-cargo vessels have increased by around 80% since the start of the year, according to Danish owner-operator Norden. Its asset management division, which looks after its owned and leased vessels, saw the value of its portfolio rise by more than $350m by 30 June. Norden owns and operates bulkers —spanning panamaxes, supramaxes and handysizes — as well as product tankers.

Henrik Lykkegaard Madsen, head of Norden’s asset management unit, said: “The dry-cargo market has been soaring this year due to a combination of a restart of demand after Covid-19 and major inefficiencies in ports around the world; coupled with one of the lowest orderbooks on record. We saw an opportunity to capitalize on these market developments.” Since the year began, Norden has sold seven vessels, comprising three ultramaxes; a supramax, a panamax bulk carrier and two MR product tankers.

Norden thinks asset prices will continue to rise for bulkers, Madsen said. “We are still positive on the dry-cargo market outlook, and we have significant upside to further asset price gains through 16 owned dry-cargo vessels and 50 purchase options in our leased dry-cargo fleet,” he added.

Norden has shifted its exposure away from tankers to bulkers over the past 18 months, during which time it has sold six tankers and purchased 13 dry-cargo ships. The company said it is “now converting the added market value to profit” by selling vessels. Some of this appreciation can be seen in the last few sales transactions Norden has completed for comparable vessels.

Last month, brokers reported that Norden sold its 61,649-dwt ultramax Nord Summit (built 2012) for $25.5m to unnamed buyers said to be based in Hong Kong. This is $3m more than Norden achieved in August, when the 61,649-dwt Nord Peak (built 2011) was sold to Hong Kong interests for $22.5m. Both vessels were built in Japan at Oshima and are fitted with scrubbers and ballast-water treatment systems (BWTS).

UK-based DAO Shipping has been revealed as the buyer of the 61,600-dwt ultramax Nord Hudson (built 2014). Norden sold the China-built bulker, which has a BWTS fitted, for $24.4m in mid-July.

It’s a case of when it rains, it pours for China’s beleaguered national grid now, something that is having a clear spill-over effect onto the dry bulk trades. Facing acute energy shortages that have seen rolling power outages across the country for nearly a month, Beijing demanded last week that the three biggest coal producing provinces — Inner Mongolia, Shanxi, and Shaanxi – raise output. No sooner had the directive gone out however than floods swept through Shanxi, which lies just to the southwest of the capital, forcing the shuttering of a tenth of the mines in the country’s most important source of coal.

Shanxi has produced 30% of China’s supply of the fuel so far this year, with coal accounting for just over 70% of the republic’s electricity generation. The dire weather has continued today with many chemical factories also forced to close in recent days. Coal futures on the Zhengzhou Commodity Exchange rose 12% Monday to close at a record 1,408.2 yuan ($218.76) a ton. Spot prices are even higher, with 5,500 kilocalorie coal in Qinhuangdao at about 1,900 yuan a ton now.

China could face a coal supply gap of 30m to 40m tons in the fourth quarter, Citic Securities analysts stated in a recent report. A shortage of the fuel could cut industrial power use by 10% to 15% in November and December, which would potentially translate into a 30% slowdown in activity in the most energy-intensive sectors like steel, chemicals, and cement-making, according to UBS.

Multiple reports over the past week show that China’s desperation for coal has seen it partially ease its year-long ban on Australian coal with tons of landed coal being moved from bonded storage at Chines ports. While this does not amount to an official policy U-turn from Beijing it underlines just how short coal reserves are.

Meanwhile, in neighboring India the coal shortages continue to hog many headlines in the mainstream press. Local reports suggest as many as 20 thermal coal plants have been forced to close in recent days, hampering power generation in many states including Punjab, Rajasthan, Delhi, and Andhra Pradesh. India relies on coal for a similar 70+% of its electricity generation like China.

The energy crunch is being felt in many corners of the world, with Europeans, for instance, facing vastly inflated utility bills this fall while in Lebanon there was no centrally generated electricity over the weekend after fuel shortages forced its two largest power stations to shut down.

For much of 2021, roaring physical freight markets in containerships and dry bulk have helped push US-listed shipping stocks to major gains. But those buoyant markets were not enough to continue the trend last week, as boxship and bulker listings were among the biggest losers despite another strong week for rates. On a week when capesize rates soared above $80,000 per day, New York dry bulk stocks dropped 8%. On a week when the Shanghai Containerized Freight Index (SCFI) hit record highs, containership stocks plummeted 9%.

This helped sent the 29 shipping stocks under coverage of investment bank Jefferies to a 5.1% fall on the week, underperforming the 0.8% gain by the S&P 500 and the 0.4% loss by the small-cap Russell 2000 index. Despite the tumble, the Jefferies Shipping Index remains up 70.8% year to date and 55.9% year over year.

The reason for the disconnect between rates and shares? As often is the case, look to China, said Jefferies lead shipping analyst Randy Giveans. “Definitely a week for the bears,” Giveans told TradeWinds. “Any cracks in China would certainly be felt the most in both containerships and dry bulk, so that was the main reason for the sharp selloff despite rates going higher.”

Giveans referenced particularly fears of short-term Chinese factory production outages as damaging boxship stocks despite record highs in key indices.  “Meanwhile, average containership charter rates also climbed higher, increasing for the 70th week in a row since bottoming in June 2020,” Giveans said.

There was another factor dampening both dry bulk and containership owners, Giveans said. “Also, some momentum investors have been exiting before rates peak, which will certainly happen during the fourth quarter before a pullback into first-quarter 2022,” he said. “This happens pretty much every year as newbuildings get delivered and demand slows due to Chinese New Year, as well as the Winter Olympics in Beijing in February in this case. That said, we expect the rate pullback will be less severe and slower than many fear.“

Investors had a more tangible reason to sell off tanker stocks – hire rates did falter on the week – and they didn’t miss, sending the stocks down an average 7%. Herbjorn Hansson’s Nordic American Tankers, the suezmax pure play, was the overall worst performer on the week with a 12.6% drop. Gas stocks were mixed, with LNG owners gaining 3% and LPG operators dropping 2%.

For much of 2021, roaring physical freight markets in containerships and dry bulk have helped push US-listed shipping stocks to major gains. But those buoyant markets were not enough to continue the trend last week, as boxship and bulker listings were among the biggest losers despite another strong week for rates. On a week when capesize rates soared above $80,000 per day, New York dry bulk stocks dropped 8%. On a week when the Shanghai Containerized Freight Index (SCFI) hit record highs, containership stocks plummeted 9%.

This helped sent the 29 shipping stocks under coverage of investment bank Jefferies to a 5.1% fall on the week, underperforming the 0.8% gain by the S&P 500 and the 0.4% loss by the small-cap Russell 2000 index. Despite the tumble, the Jefferies Shipping Index remains up 70.8% year to date and 55.9% year over year.

The reason for the disconnect between rates and shares? As often is the case, look to China, said Jefferies lead shipping analyst Randy Giveans. “Definitely a week for the bears,” Giveans told TradeWinds. “Any cracks in China would certainly be felt the most in both containerships and dry bulk, so that was the main reason for the sharp selloff despite rates going higher.”

Giveans referenced particularly fears of short-term Chinese factory production outages as damaging boxship stocks despite record highs in key indices.  “Meanwhile, average containership charter rates also climbed higher, increasing for the 70th week in a row since bottoming in June 2020,” Giveans said.

There was another factor dampening both dry bulk and containership owners, Giveans said. “Also, some momentum investors have been exiting before rates peak, which will certainly happen during the fourth quarter before a pullback into first-quarter 2022,” he said. “This happens pretty much every year as newbuildings get delivered and demand slows due to Chinese New Year, as well as the Winter Olympics in Beijing in February in this case. That said, we expect the rate pullback will be less severe and slower than many fear.“

Investors had a more tangible reason to sell off tanker stocks – hire rates did falter on the week – and they didn’t miss, sending the stocks down an average 7%. Herbjorn Hansson’s Nordic American Tankers, the suezmax pure play, was the overall worst performer on the week with a 12.6% drop. Gas stocks were mixed, with LNG owners gaining 3% and LPG operators dropping 2%.

Indian farmers are expected to harvest a record 150.5 MMT of grains in marketing season 2021/22, up from 149 MMT last season. Rice is estimated to hit a record 107 MMT, up from 104 MMT. Market participants expect the higher harvest volumes to lead to a boost in shipments. India accounts for 45% of the global rice exports market and will likely gain market share on higher sales to buyers across Asia and Africa.

According to industry officials, higher freight costs and a rally in global wheat prices are attracting Asian buyers at rates that could raise the wheat exports to eight-year highs in 2021. India’s wheat inventories are currently at record highs, while wheat supplies from Russia and Canada have dwindled. With human and feed consumption driving demand, India’s wheat exports are forecast to reach 4.2 MMT this year, the highest since 2013. India harvested a record 109.5 MMT of wheat in 2021. State-run agencies currently hold a record 51.8 MMT, more than double the required buffer. Though prices have risen recently, Indian wheat remains cheaper compared with other countries.

Sugar exports in marketing season 2020/21 recorded an all-time high of 7.2 MMT, up 20% from the previous season. Driving exports were government backing, stronger demand from foreign markets and reduced competition from Brazil. Indonesia was the main buyer at 1.8 MMT, followed by Afghanistan, UAE, and Somalia.

The IMO’s decarbonization goal — a 50% reduction in greenhouse gas emissions from shipping by 2050 compared with 2008 — lacked credibility when it was established three years ago. Since then, the debate has moved on so rapidly that lethargic progress towards an anyway lackluster target is simply untenable. With flash floods now devastating Belgium as well as Bangladesh and forest fires torching some of the wealthiest suburbs of Los Angeles, first world governments are finally getting a move on in the fight against climate change. Meanwhile, official research from the IMO last year shows that shipping’s greenhouse gas output continues to rise. That should be a badge of shame.

The political and commercial consensus is now such that our industry can no longer sit at the back of class and hope teacher does not notice it has not handed in its homework. With a clear majority of IMO member states seeing net zero as imperative, backed in principle by even the most conservative end of shipping opinion, it’s time for official endorsement of net zero. To get there by mid-century means effectively doubling down on current objectives. That’s a big ask, but possible. Just look at the challenges facing our peers.

Fossil fuel — arguably the most politically influential industrial sector of all — will essentially have to achieve its own abolition. Agribusiness must somehow curtail what we shall delicately call bovine flatulence, which produces more and worse greenhouse gases than all transport modes put together. Yet most of the environmental, social and governance policies bandied around the maritime sector right now lack substance. The ‘burn now, pay later’ mentality from those seeking to slap an unconvincing coat of greenwash over business as usual has so far been allowed too easy a ride in the absence of regulatory frameworks.

The creation of market-based measures to expedite uptake and deployment of zero-carbon technologies and fuels has realistically only seen the opening salvos fired in what promises to be a long war. Let’s not forget that back in 2013, when market-based measures were last on the table, the IMO debate spectacularly imploded, as climate economics created a schism between developed and developing nations. Not enough has changed in the intervening years to instill any confidence that history won’t be repeated. Technology has an important part to play, and there are realistic prospects of getting carbon neutral vessels on the water by the end of the decade. But this is ultimately a climate finance battle, not an engineering problem. A global system of carbon taxes or a levy, with some form of redistribution to ease the pain inflicted on the poorest, while obvious and necessary, will not be agreed easily.

For the IMO, there is also the added question of who controls those funds once they are agreed. The IMO itself is not an agency capable of administering billions of dollars of climate funds. The World Bank is already eyeing the opportunity, and if it can ensure that the money is ring-fenced to shipping, would seem to have the more apt skill set. It will also be essential to adopt a tough mid-term measure, adopted around 2023, to close the price gap between fossil and green fuels by 2030. As the UK prepares to host the COP26 climate summit next month, debate in this country, already heightened by the antics of the Insulate Britain protests, can be expected to intensify further still. Meanwhile, most shipowners await regulatory clarity and available zero carbon infrastructure before taking strategic and investment decisions in which it is their money on the line.

Therefore, setting a target is so much more than a gesture. Formal IMO espousal of net zero will provide an explicit signal to all parties across the maritime value chain that the transition is non-negotiable and irreversible. That will be a good thing for the planet. And ultimately, it will be a good thing for the shipping industry as well.