Why Rivals Are Working Together to Transform Shipping | Bo Cerup-Simonsen | TED

Lindsay Levin: We’ve just heard from Maersk, just one of the players that you deal with. Why is a center like yours needed? Bo Cerup-Simonsen: Because we're looking at a massive systemic change.

It’s huge, and it needs to happen fast. No country, no company, no matter how large and powerful, can do this alone. So collaboration is going to need to be a part of the solution. And our center is all about that. It is all about collaborating across the ecosystem, across the value chain in order to accelerate the transition. What Maersk is doing is absolutely exemplary, but few companies have the resources and have the courage to do what Maersk is doing. So you can say it's moving, it's scaling too slowly, when you look at the industry-wide perspective. So what we really need to do is to turn those first-mover activities, those leading activities, into industry-wide practices. And so this is what we're doing in our center, this is what we're aiming to do. And when the center was established, about three years ago, with a large philanthropic donation from the A. P. Moller Foundation, the basic idea was that we need to create a completely new way of collaborating across the ecosystem. The basic idea was that we need to establish an independent center that would have no vested interest. We need to collaborate with governments and with companies across the globe, across the ecosystem, and we wanted to establish a team co-located so that economists and engineers and so on would sit side by side and imagine the future and develop the solutions. So this was the idea. And of course there were a lot of concerns about compliance and antitrust and IP and confidentiality and practicalities. But we have found a model now, we have overcome those challenges. And now, today, we have more than 100 organizations across the globe joining the center. Many are sending people to our team in Copenhagen. Competitors are sitting side by side to develop the solutions of the future.

LL: So that's fabulous. Give us a sense of where and why we're still lagging. BCS: Well, if you look three or five years back, I think we were lagging on the technology side, we were lagging on the commercial side, we were lagging on the regulatory side. But over just the past few years, and you just saw an amazing example of that, we've seen tremendous development in the space of technology. So now, just over the next one to two years, we will see container ships, like what you just saw, we'll see tanker vessels, big bulk carriers, cruise ships, car carriers being built and getting in the water, running on new types of fuels. For example, methanol, methane, ammonia a little later. So this is now all maturing, and the technical readiness level is really high. So the big focus now is on the commercial readiness, on the upscaling opportunity and the barriers for that. And there, we're looking at two categories of drivers and also two areas that we have to focus on. And one is a purely market-driven one where a customer demands a green product, a car, for example, an electric vehicle, and that has to be produced. And that supply chain needs to work in a green manner. So that is driving now a part of this transition. As we just heard, it's just that on the industry-wide scale, it's not moving fast enough. But then we have the regulatory side, and here we've just had a major breakthrough in the International Maritime Organization. So just about a week ago, all 175 countries came together. They agreed. We had Asia with China, we had Europe, we had US, we had Africa. Everybody agreed that we need to update our strategy. We need global regulation for shipping, we will go to zero by around 2050, we will use sound technical measures to go there, and we will use economic measures like a carbon pricing. So that is now a global framework that has been agreed across the globe. So it's a fabulous fundament for moving forward from here. LL: Yeah, so congratulations to all of those involved in that. (Applause)

What's still difficult and what are the opportunities? BCS: So it's still difficult going forward because we're looking at a massive change on a systemic level and a massive change on individual level. So a shipowner is looking into an uncertain future. It's much easier to quantify the additional cost and the additional risk than it is to quantify the additional opportunities or the risk of not doing anything. So that means a lot of companies and a lot of countries are stuck with this uncertainty and are hesitant to move forward. A ship owner will be hesitant because she doesn't know which fuel type to bet on or if the customers will pay. A country, for example, a developing country, is hesitant because it's concerned about increased cost of imported goods or how export competitiveness will influence workplaces and so on. So this is a lot of uncertainty in there. And this is where we work as a center to address all those uncertainties and those risks and remove those so that decision makers can move forward.

LL: So finally, give us an example of a specific thing that the center is doing to help affect that kind of change. BCS: So one of the great things, or one of the things that we've had a lot of interest in recently, is to work with green corridors. A green corridor is the realization of that new business system. So we work, for example, a lot with the Chilean ministries and we've worked a lot with stakeholders in Chile to understand how Chile can produce renewable energy, how they can turn that into fuels, how they can retrofit their ports, how ship-owning companies can transport using green fuels, and how, for example, the Chilean mining industry can transport copper with zero carbon transportation so that they can export green copper that can be used in, for example, electric vehicles in the future, and thereby support the production of these green supply chains. So green corridor is really getting all those stakeholders together across the entire chain. It is reimagining, you can say, the future, putting that new business system in place, defining how that new business, what it looks like. And we are right now, for example in Chile, brought that all the way forward to feasibility study. So it's very concrete now. And then we take that learning and we turn it into a general blueprint and we share that with the world so that every region, everybody can go in and use this cookbook for how to develop a green corridor. And I think this is our way of working. We try to identify the decision makers that can really make this move. And then we work specifically with those leaders, both on company level, so this is typically at strategy, leadership level, or in country government level, to understand what do they need in order to move forward. So in addition to the green corridors, we've developed a number of guidelines and services, how a ship owner should invest in new ships, how a country should support the development of future regulation, etc. So this is our way of working. LL: Fabulous, Bo, thank you very much for the work that you're doing. I know that there's going to be a lot of people here in other industries that want to learn from your example. Thank you for being with us. BCS: Thank you very much. (Applause)