Parallel Session A5: Achieving Sustainable and Resilient Transport and Logistics including inSIDS

Exploring the balance between sustainability and resilience in global freight transport and logistics

During a panel discussion on the interrelationship between sustainability and resilience in freight transport and logistics, experts delved into the complexities of aligning these two critical concepts within the industry. The panel began by examining the impact of globalisation on supply chain vulnerability, acknowledging the economic benefits it has delivered while also recognising the increased exposure to disruptions it has created. The traditional supply chain management model, which promotes practices like centralisation of inventory and single sourcing, was criticised for contributing to this vulnerability, suggesting a need for a more robust approach in an era of unpredictability and environmental challenges.

The just-in-time (JIT) principle, a cornerstone of modern supply chain management, was scrutinised for its role in creating vulnerability. The pandemic brought attention to the JIT principle, with suggestions that a shift towards ‘just-in-case’ inventory might improve resilience. However, the environmental implications of such a shift were debated, as it could lead to increased emissions from warehousing and factories, despite potential reductions in transport-related emissions.

The use of artificial intelligence (AI) and machine learning to predict future supply chain disruptions was also mentioned as a promising development. These technologies could enhance supply chain visibility and help companies manage compliance with new regulations, such as the US Forced Labor Law Act, which demands a deeper understanding of supply chain tiers.

Geopolitical developments significantly disrupt supply chains and emphasise the need for regional integration to mitigate such disruptions. The panel discussed the potential for new legislation, such as the EU’s Corporate Sustainability Due Diligence Directive, to incur additional costs and potentially lead to disinvestment from developing markets, raising concerns about unintended consequences.

The unique challenges faced by Small Island Developing States (SIDS) in achieving sustainable and resilient ports were underscored. The Caribbean SIDS, in particular, face amplified effects of global supply chain disruptions due to their location, size, heavy trade dependence, and reliance on a single mode of transport. The recent implementation of the Carbon Intensity Index (CII) by the International Maritime Organization (IMO) was highlighted as a concern, with the potential to impact the quality of life in these islands due to its implications for maritime transport.

The panel concluded by emphasising the importance of considering the environmental, social, and geopolitical dimensions simultaneously and the need for collaborative efforts to support vulnerable regions such as the Caribbean SIDS. The discussion highlighted the need for a nuanced understanding of the interplay between sustainability and resilience, and the role of technology, legislation, and international cooperation in shaping the future of global supply chains.

Alan McKinnon:
This is about the time in the afternoon where we’d all like a coffee break, but hopefully we’ll be holding your attention and stimulating you in the next hour. You can see the title of this session. It’s got the words sustainability and resilience in the title. These are probably the two most heavily used words over the past day and a half. I don’t know, some of you may be suffering forum fatigue whenever you hear those two words mentioned. So we’ve got a challenge to try to take a new angle on these subjects to maintain your interest. And one angle we’re going to take is looking at the interrelationship between sustainability and resilience as that relates to freight transport and logistics. And to help me discuss this, I’ve got a very distinguished panel. So on my immediate left is a fellow Brit, John Manners-Bell. Some of you may have heard him moderate the first session today. So John is the founder and CEO of Transport Intelligence, one of the main market research companies for global logistics, and the author of many books as well. So I don’t know when you find the time, John. And then we have Zera Zeng from Maersk. She heads up the business continuity consulting unit within Maersk. So that brings shipping expertise to the panel. Then we’ve got Darwin from the Port Management Association of the Caribbean. But you also have a day job in being the CEO of the port in Antigua. So obviously ports are critical both to the decarbonization and to the resilience of global supply chains. So again, it’s great having you on the panel. And then finally, at the end, we have Miriam from ECLAC, who again has been in other panels today. I mean, you’ve been overworked as far as I can see. And she has responsibilities for infrastructure and resilience. So this is gonna bring varied perspectives really to our. our subject area. As moderator I’m going to have the liberty of giving a short presentation really to set the scene and to flag up some of the key issues that we’re going to be addressing so I’ll go over to the lectern. Perhaps I should say a few words about myself. So I work at the CUNA Logistics University in Hamburg which we think is the only logistics university in the world. It was set up in 2010. It’s a legacy project of Klaus-Michael CUNA who is the majority owner of CUNA-Nigel and we get funded by the CUNA Foundation and there are some members of the foundation here today. We’re still a small university, we have about 30 professors and about 400 students but we’re just about to globalise so we’re hoping to open up many KLUs around the world. So anyway what I thought I would do is look at this interrelationship between resilience and sustainability as it relates to logistics because in the discussions I’ve heard over the past day and a half I think there’s an implicit assumption that what we do to make supply chains more sustainable will also make them more resilient. Well is that true? To what extent may there be conflicts between the two? Just to set the scene a couple of photo mosaics. One on sustainability reminding ourselves of all the negative externalities of freight transport covering all the different transport modes. It’s a fairly dirty profession that we’re in and we should obviously be doing everything we can to improve its environmental sustainability. And then on the resilience side some photographs just to recall the recent history of supply chain disruptions. Again over the past two days a lot of the discussion has been on what’s happened in the past two or three years but if you take a 20-year perspective on this you can see there have been a lot of mega disruptions of supply chains. I’m an academic as I’ve said there has been an explosion of academic literature on how we deal with these supply chain disruptions over the past 20 years. So how do we define resilience here? This is my preferred definition, comes from Professor Yossi Sheffy at MIT. Those eight words seem to me to sum it up, it says it’s the ability to bounce back from large-scale disruptions. Used to be we thought we could bounce back rapidly so that supply chain disruptions would have a V profile and then some disruptions were big and took longer to recover from, so they’ve got a U profile. And then of course there are examples of different disruptions occurring in quick succession and they’ve got a W profile. And what’s been happening recently, we never seem to get back to where we started, right? There’s a very irregular profile I think for many of these supply chain disruptions. And as a result of that, some people are suggesting that we shouldn’t be thinking any more about resilience, it’s rather adaptation. It’s not that we’re going to be bouncing back to some previous state, rather we’re bouncing forward to some new normal. But again, to give this some historical perspective, I mean I’ve been an academic now for 44 years in this field. I’ve written textbooks, I’ve lectured hundreds, thousands of students and I, like other supply chain professors, have been preaching a paradigm for the way in which we manage supply chains comprising these various things, encouraging centralisation of inventory, single sourcing of procurement, globalisation obviously, just-in-time replenishment, minimum inventory, tightly coupling processes. This has been portrayed as best practice in the way we manage our supply chains and that’s been great because it’s delivered lots of economic benefit but the downside is it’s made our supply chains extremely vulnerable. And this is what I call self-inflicted vulnerability. And it seems to me this model of supply chain management is just not sufficiently robust any more for this new era that we have entered of turbulence and unpredictability. and potentially it’s not going to help us decarbonize our supply chains. It’s leaving our logistic systems perhaps a lot more carbon-intensive than they need to be. So what I’d like to consider in this session is this relationship between resilience and environmental sustainability. Two years ago there was an article in Forbes magazine, that was the title, suggesting that what we do to make our supply chains more sustainable will also make them more resilient. I’m not entirely convinced. I think there are some ways in which sustainability and resilience will probably be well aligned. In other cases there’ll probably be some trade-offs. One thing we can maybe agree upon right at the start, however, is that there are some things that we can do in the management of our supply chains which will yield both sustainability and resilience benefits. One is improving supply chain visibility. Allowing us, for example, to measure the scope three emissions which were discussed in the previous panel, but also to build up risk profiles of the upstream supply chain which will help us to improve resilience. And the second thing is the supply chain collaboration. No question that if we do that properly it will help us to make better use of our logistics assets and that will yield economic as well as environmental benefits. But it will also permit joint contingency planning so that companies can work together to try to minimize the risk exposure to their supply chain. So those two things it seems to me are well aligned. But if we think on the one side of all the things that we can do to improve the sustainability of freight transport, it seems to me basically there are five things. One is we can just constrain the growth of freight movement. Secondly, we can get as much freight as possible onto lower carbon transport modes. The third is to optimize our use of freight transport and logistics assets through the vehicles and the ships and aircraft. We can improve the energy efficiency and then finally we can reduce the carbon content of the energy we use. And I think everything falls into one of those five categories. And then on the result, and maybe I should say that the first of these… may not be appropriate in every country, again if one looks at history you see there’s a very close correlation between the growth of economies and the growth of freight movement and therefore countries at an earlier stage in their economic development probably will not be too keen to constrain freight movement for the fear that that would jeopardize their future economic prospects and then on the other side if we look at the main things you can do to improve the resilience of a supply chain some people argue you can do that by localizing the sourcing shortening the supply chain you can decentralize production and warehousing reversing the processes of the past few decades we could relax the just-in-time principle building more inventory into our supply chains we could try to reduce our dependence on high-risk sources either particular companies or countries and then finally we just diversify procurement both of products and services. Now what I’ve done here is try to map the interrelationship between those sustainability options and the resilience options and I’ve made a distinction between the interconnections which I regard as synergistic where they’re working in harmony and the ones where there would be a trade-off. Now I don’t have time now to go through and talk about every link in that diagram but what I would like to do is just focus on two of the resilience measures to see to what extent they might also improve sustainability and the first is this widely discussed idea that somehow if we de-globalize the global economy if we reshore or nearshore something that John was talking about in the first session today that that will make our supply chains more resilient and I have to say that I’ve read a lot of literature in this area both the academic literature and the popular press and I think a lot of it’s a bit naive they tend to think of global supply chains as connected in China, with distribution centres in Europe or North America, a unidimensional view. In effect, global value chains, supply chains are immensely complicated, and therefore it’s not very clear what we mean by actually shortening supply chains. If there were a pronounced process of de-globalisation underway, that’s going to take a while. It’ll take a while for value chains to be reconfigured, and at the end of the day, that need not actually improve the resilience of supply chains, because if we concentrate more of our sourcing in the home market or in near markets, that can also carry risks. And then the implications of this for environmental sustainability, no question, if we reduce the amount of trade-related freight transport, that will reduce the related negative externalities. So there would be environmental benefits in that. However, once you do a full product lifecycle analysis, what you discover is that a lot of international trade is actually good for the environment, where the emissions are lower in the exporting country than they are in the importing country. And so it’s reckoned about a third of international trade actually yields a net emission reduction. The other thing is that our global supply chains rely on shipping, and we’ve heard so often that shipping accounts for about 80% of international trade, and that is by far the lowest carbon transport mode. So therefore, if we shorten a deep sea freight movement, for example, that is not going to dramatically reduce emissions. And then the final point is that if we were to de-globalise, that I think would have an adverse effect on the development prospects of many countries, and that would then make it harder for these countries actually to deal with the environmental crisis. So I think we’ve got to be aware of the complexities really in debating this one. And then my second option is relaxing the just-in-time principle. That got a lot of attention. during the pandemic that was from an article in the Financial Times saying that businesses should be moving from a just-in-time process of replenishment to a just-in-case one to build more inventory into their supply chains. But there’s been an academic backlash against that recently. This is a journal paper just published a few months ago defending just-in-time, saying that in the popular press the just-in-time principle has been misunderstood and that many companies have been misapplying it. So what they argue is okay there may be a case for building up inventories of certain critical materials but we would be foolish to abandon the just-in-time principle. And then if we look at the environmental implications of relaxing just-in-time that could yield some benefits as far as freight transport is concerned because it would allow us then to consolidate loads and make better use of vehicle and vessel capacity. It would make it easier to shift transport mode from road to rail or from air to sea. It would also allow us maybe to slow down the freight movement. I published a journal paper back in 2016 suggesting that supply chain deceleration should be considered as a way of decarbonizing supply chains. But again we’ve got to be careful. We might cut our freight related emissions but relaxing just-in-time would almost certainly increase emissions from warehousing and from factories. So until you do a proper holistic analysis it’s very hard to judge exactly what the net effects would be on emissions. And we should also recognize that just-in-time is not just a stock control system. It is a whole business philosophy designed to minimize waste and that includes the waste of energy. And the other thing is our production, our logistic systems after decades have adapted just to just-in-time. So we lack the storage capacity for example to simply increase inventory levels. So it would take a while and involve a lot of investment it seems to me to move to a non-JIT world of higher inventory production and distribution. And then finally, this is my final slide, to see how all of this relates to SIDS. Obviously just some general points I will make. This is partly reiterating what I’ve heard over the past a couple of days that the feeling that the location size, heavy trade dependence, reliance on single mode of transport which characterize the SIDS has the effect of amplifying the effects of global supply chain disruptions, and hence the need for this conference, it seems to me, because this highlights the importance of this subject to small islands. But they are also very vulnerable to natural disasters. So in addition to the problems they have in being interconnected into global supply chains, they have localised problems in that given their locations, predominantly in the tropics, they suffer from natural hazards, as you can see, and that’s very costly. IPCC in its sixth assessment report last year actually said this, that small islands present the most urgent need for investment in capacity building and adaptation strategies. Obviously in these islands very closely between economic development, resilience and sustainability, which I think will come out in our discussion. And then just to end on a more positive note, something which will help SIDS both to improve sustainability and improve resilience is the move from fossil fuel to renewable energy. It will be costly, it will take time, but ultimately it will deliver benefits on both fronts of sustainability and resilience. Okay, so that’s my perspective on all of this. I’ll shut up now and I’ll invite my fellow panellists to give their opinions. So I’d like first to turn to John Manners-Bell. And John, I don’t know what your reaction is to this. I mean, John has published a book recently called The Death of Globalisation, which is very provocative. But I think you’re also going to talk to us a little bit about the social dimension of sustainability. because I simply talked about the environmental one, but there’s a lot more to sustainability clearly. So over to you, John.

John Manners-Bell:
Thank you very much, Alan, again, for a masterclass presentation on sustainability. Yes, when we had original conversations about the angle that I could take when presenting to you, I went back in my mind to some work that we undertook when we were both on the Logistics and Supply Chain Council, the World Economic Forum, and that related to what we called at the time the triple advantage. That’s the role of people, planet, and profits in creating sustainable and resilient, catchphrase again, and inclusive. Can I add another one to that? By all means. Yeah, and inclusivity as well. And that work we did still holds very good, I think, in terms of when we talk about those particular issues. And I think it’s one area which probably hasn’t been covered as much as the environmental impact of supply chain in the conference so far. So I feel confident about talking a little bit more about the ethical and societal dimension of supply chains. And this certainly was picked up yesterday, if you remember, by Prime Minister Motley, who said that supply chains start with people and we need to ensure decent work. But I think one of the trends that we’ve seen over the last 20, 30, 40 years, as we’ve all very much aware of, of globalization, has been it’s very difficult now to ensure that OEMs, the supply chain owners, actually can have the visibility of what’s going on at a lower level in terms of the lower level tier suppliers. Prime Minister Motley was absolutely right. It starts with people. So when we’re talking about harvesting fresh fruit and vegetables or harvesting bananas, or if we look at other sectors in terms of critical minerals in the Congo, or if we’re looking at the fashion sector and the conditions in which workers in Bangladesh or other parts of Asia are being employed in to enable us in the developed world, talking personally, to be able to get $3 T-shirts or whatever it is. So I think it’s hugely important that we really talk about the levels of visibility in lower tiers because modern supply chains are complex, multi-tiered, and opaque, as we all know. And just to quote one survey on this, I think 75% of supply chain managers when interviewed believed that modern slavery existed at tier three in their supply chains, which is absolutely incredible because it’s not, you know, many supply chains have five, six, seven levels of suppliers. And so if you’re just talking about three quarters of suppliers employing people under what could be called modern slavery terms, I think that’s a real eye-opener. There are lots of issues related to this. I won’t go on, I won’t talk too much in my introductory notes, but it’s maybe something that we can come back to. There’s a lot of work being undertaken. There’s a lot of legislation being passed in the EU. We saw the corporate system. sustainability due diligence directive being passed earlier this year, which will have an impact. But there are also unintended consequences of all this legislation which is being passed, which I think needs discussion. Because if it results in more costs being placed on the leaders of supply chains, on the OEMs, then that’s going to impact on sourcing policies. And that might mean that they actually pull investment out of developing markets, which is exactly the opposite of what this legislation is designed to achieve. So it’s a very nuanced, it’s a very complex issue. Legislation probably is taking maybe a very broad brush or blunt approach to it. And as I say, this could end up with unintended consequences which really need discussion. So I’ll leave it there.

Alan McKinnon:
That’s great, yeah. Thank you for that, John. And we’ll come back, I think, and pick up on some of those points shortly. Okay. Moving on now to Zera. So your day job obviously relates to business continuity. So yeah, this is pretty fundamental clearly to resilience. And I think you were suggesting you’re developing a partnership possibly with UNCTAD. So would you like to introduce yourself and comment on that? Yes.

Zera Zheng:
Thank you very much, and also allow me to extend my thanks to UNCTAD, and especially the DTL team for inviting me to this great event, and also to give me the opportunity to share my insight and discussing this important topic, sustainability and the resilience of a supply chain. Also a bit about my job. Actually, you see that my role in Maersk is responsible for the global business resilience consulting in Maersk. So actually, my functions is newly created two years ago. This is also underscored the increasing needs that we observe from the customer side. So a lot of Maersk customers, maybe some of you sitting over there, actually, especially these two years, these two or three years, and actually we are seeing the growing uncertainties and the disruptions are hitting our supply chain. And from customer side, actually, we also see they are struggling with that. They see the importance of having resilience in places, but they don’t really know how to do it. So we also established this function to really help our customers to work together on supply chain resilience. To address that, we actually internally develop what we call the Maersk Supply Chain Resilience Module. That’s kind of a methodology we use to help our customer identify the vulnerabilities and the dependency they have on their supply chain, and also to hands-on with them to develop the contingency plan against these, in case of loss of these dependencies, what they’re going to do. And also for some specific crisis, disruptions, and also we provide the risk insight and also foresight as well to our customers. Also part of my job is also involved in the real crisis management cases at Maersk. I see that Professor Alan Sedbegili is showing a lot of pictures about these disasters. Quite a few things, like the Suez Canal blockage, if you recall, that’s happened in 2021. That’s I got involved in the contingency planning, so when the vessels are blocked there. So how we got to manage the crisis, how we got to manage the customer communication. So also for the ones in 2022. the Ukraine-Russia conflict. Also, I working with a lot of functions within MERS on these contingency planning. We also worked closely with the UN different functions to continue move some essential goods and delivery into Ukraine, for example. So actually, this is also allows me to really have the insight about what’s going on, what’s the development of the situation. And meanwhile, also to allow us to work closely with our customer to provide them the timely information of the situations. A part of that, also I contribute to some key publications like the NTAG, the Port Resilience Guidebook that was released two years ago. Actually, as Professor Allen mentioned at the beginning, recently we’ve also having, I’m also quite happy with that, is we are having an ongoing dialogue with the NTAG team to develop, to have the partnership to further enhance the supply chain resilience together. Also, I see that through this partnership, we probably can contribute significantly by sharing the knowledge, good experience, and also to even collaborate in some projects that aim to improve and enhance the supply chain, global supply chain resilience. So specific on that ones, and actually, we also expect to have some detailed initiatives that to be aligned, to be agreed by both parties in the following. And also, I’m really excited that we can work together and collaborate together and to really drive and push, contribute as well, to the global supply chain dynamics. So, that’s about myself. Can I be a bit naughtier and ask you, to what extent do you and your business continuity unit within Merrill? interact with the people responsible for decarbonizing shipping. Is there a formal interaction between the two? Yeah, that’s also a quite interesting question, you know, MERSC, we have employees, more than 100,000 employees globally, so we do have a relatively large team on sustainability. A lot of the people are working on that, and also because of MERSC businesses across, not just the ocean business or shipping business, but also we have in our terminal, AP Muller terminals, globally, and also we have our own logistic teams that really have our own trucking fleet, and even we have our own aircraft fleet, by the way. So our sustainability actually across these functions to work out, for example, especially on the transitions toward these green fields, and also closely working with different functions, asset functions, on these green infrastructures that need to be invested by MERSC. So between the sustainability and the resilience, so we also work in a closer collaboration, because we do see there’s definitely a large room we need to collaborate. We see the climate change, how climate change can make a difference and make an impact on the supply chain, also on the countries as well. So we do see that also no matter from the sustainability side or even from the resilience side, we do feel that we can definitely play a role to really help with the countries and also help with the global supply chain, help with our customers to really navigate through these uncertainties.

John Manners-Bell:
Thank you very much. So we are the three visitors to the Caribbean, our last two panelists have got local knowledge. Or to you, Darwin, I mean, so from your sort of Caribbean port perspective, I mean, how do you react to this relationship between sustainability and resilience?

Darwin Telemaque:
Thank you very much. I think, first of all, I’d like to thank UNCTAD for the opportunity to be part of this forum. And I am particularly grateful to be speaking of a very important subject, which is relevant to every small island in the world, which is how do you maintain or develop sustainable transport logistics? There’s some very basic facts about living on an island. In many instances, you have one port. There’s some islands with multiple ports. And so your typical mode of transport is maritime. And so there is a very interesting focus. Instead of trying to develop too many options, because you become centralized with clear knowledge and 95% of your goods travel by sea, that means you zoom in the focus on how do you create resilience and sustainability for maritime transport. We are challenged, however, as small islands, by some realities. One of them, I was listening to your slide here, spoke about development capacity, development funding. As a matter of fact, when I saw the map with the islands of the Caribbean as red, I thought about the danger that exists every year for us, created by international entities exposing us to significant vulnerabilities and we almost appear to be a path for transporting the ills of nature constantly to where we live. That being said, our resilience is challenged by our own capacity to design systems that are sustainable and resilient. I am the chairman of the Port Management Association of the Caribbean. We represent 26 different ports and of all these ports we would be, it would be clear that we can say none of us are at a position where we can say we are indeed sustainable or resilient in terms of the context, international context. Additionally, when we look at our capacity to provide development funding there are some agencies in the world that will say to islands like Barbados and Antigua and some others that your per capita income is too high to allow you to get development funding and those same agencies will say but you have to develop in any design them anyway and so there are factors that limits our capacity to actually get to a resilient position and some of those are outside of our capabilities. Now as it relates to our ports themselves, of the 26 ports most of them, 90%, were built in the 1960s so I’m not sure we should be speaking about resilience and sustainability for those ports. We should be talking about appropriate development models that would first position those ports to be efficient in fulfilling their mandates from an infrastructural perspective and I think the need to point that out to the world as we move so swiftly towards implementing regulations that are creating further burdens on these ports because we have not yet moved to any high level of development, but we are being told with the recently implemented CII regulations by the IMO, you now need to ensure that you facilitate traffic to your ports efficiently to minimize the impact of carbon, carbon creation, carbon production. And in reality, we are just not in that space and it would be unwise for us to go beyond where we are as a region to even suggest that we are prepared to do so and the clarion cry from the region is what do we do? So we’ve already started seeing impacts of the CII on our ports. We have Haiti that lost one. We have other smaller islands that are already losing traffic where ships are pulling back, trying to make adjustments, and then the noise in our ears from shipping lines are become more efficient. You have to be more efficient, otherwise we don’t know what’s coming. So there are some great challenges that face us as small island ports, but it’s not related to the issue of resilience just yet. I might add, even in having that discussion, that as the discussion on resilience and sustainability and net zero continues, we are further challenged by which type of fuel or which type of source of energy will actually emerge. So at one point, we’re talking about solar, wind, and remember, we are receiving information. We sometimes try to participate in the global space, but there are limits to how far our voices can reach. We thank you for this opportunity today to have one. And so we will say that we need to understand as a region more clearly what’s the direction. And once that direction is made out, there has to be a supporting component that says, we’re going to provide some support to get you there. Because the small island states, we need those supporting elements to do that. And there can be no clearer example of the need for some support than what the IMO recently implemented carbon intensity index is threatening to do to our region. The threat that that poses to quality of life living in the island itself is quite a challenge because as ships navigate the score of the CII and try to meet a level that doesn’t get them into further problems, it’s impacting our islands and our ports are not prepared to respond. So I’m here saying we have a conundrum. Our ports are not prepared. The global mandate is in. And if there is a need for a resilient response to a sustainable way of life for our people, we are asking for that now to the IMO, to the UN and the other agencies. We need to find a way to ease the pressure. We’re not advocating for ships because the ships will fight their way through. As a matter of fact, if you look at global shipping, the big giants are able to speak boldly of their capacity to make the adjustments, they make the investments, they have the tools to do so. But we, with ports that rely almost 100% on maritime, we need some space and some support to get to that space where we can begin to start speaking about the type of impact that we can have in terms of the global transition from heavy fuels into more renewables. And we want to. But sometimes your hand can’t reach as far as you’d like it to. And we’re saying to the best part of the world, which we are, cruise ships are coming in and they’re asking us for shore power, okay? We want to give them shore power, but one cruise ship takes 15 megawatts, and Antigua supplies 30 a day, and that just tells you, there are five cruise ships, it outpaces the production capacity of our entire island. And so when the maritime desire for that sort of capacity shows up, we better figure out what do we do, and so that requires a discussion. Why? We are 68% of world cruising. So for cruising to decarbonize, our ports need to be addressed, and I am not so much even concerned about cruising per se, and I love cruising, and that’s my mandate as well, but it is what’s going to happen to our cargo ships that feed us that I’m mostly worried about, because those have a whole different requirement. So if there is a space on this panel, in the audience, or there’s an IMO rep, we’re looking for a little carve out. It’s not a nice word, but I’ll say throughout this whole SIDS meeting, we want to have a carve out for our region, for small islands, and I hope we can get someone who wants to have a resilient discussion in that respect. Thank you very much.

Alan McKinnon:
Thanks Darwin. I found that very enlightening. I’m not a mainstream maritime specialist, but I thought CEI, the Carbon Intensity Index, just related to the vessel. I didn’t realize there were wider implications for the ports. So I think that’s been a very important point you’ve made.

Darwin Telemaque:
Yeah. The vessel doesn’t exist by itself. It comes to us. So I’ll give you an example. Antigua has a crane, so we can discharge… 22 moves an hour and the ship is kind of happy it wants more but it’s at least getting 22. The next two islands don’t have cranes and so that ship will only discharge seven or eight and so you see the productivity disparity immediately but hold on when it gets to that second port there’s a cruise ship that means it has to wait now before it goes in to use its crane to discharge seven moves an hour that’s a reality that can’t change tomorrow or next week and so therein lies where we have to understand that we’re not speaking about putting the pressure on classifying a ship we’re saying we’re going to impact people and ports serve people ships bring cargo to us but we serve our citizens and we’re advocating for them and we’re going to keep doing that for the next two days

Alan McKinnon:
yes excellent so you’ve articulated that point very effectively and hopefully we might get some response from some of the decision-makers in the room so thank you for that and then last but not least Miryam I think you were going to talk to us a bit about the work you did during the pandemic is that right so maybe you could elaborate on that thank you

Miryam Saade Hazin:
hello I thank you very much it’s an honor to be with you moderating this panel with all the colleagues and thank you again for for this invitation when I would like to to when in the morning they say I work at the at the Central Bank as well I there was a total change no of visibility during the 90s when I was there always we were thinking about they know the economic crisis the financial crisis and we didn’t think about the environmental social crisis a do During the pandemic, before the pandemic, when we heard about resilience, always we thought about environmental, no climate change impact for resilience. We didn’t have that work of resilience in other aspects. I can say that when the COVID crisis arrived, we have, as we have mentioned, all the disruptions of the supply chain. And finally, the countries that were the more connected, they have the best infrastructure transport, were the ones, those who were benefit from the access to the vaccines. And I was going to say that that project at ECLAC, that I’m looking at Ricardo Sanchez, that he was the chief in that moment when they implemented this project together with UNTAD and all the regional commissions. And that is about that, about the transport and trade connectivity in the age of pandemic. In that moment, it was something very, very new for everyone, to have not only, as always, economic or financial crisis. In that moment, there was a sanitary crisis, an environmental crisis, that at the beginning, it was like a ball of snow. At the beginning, a start, and even when they have the impact on inflation, with all the disruption of the supply chain, and the freight rate that they start to increase, because of the congestion and all the disruptions. They thought that the inflation was a transitory impact, and it was at the end not transitory. At the end, everything was new for everyone. So UNTA, together with the Five Regional Commissions, start to analyze this topic and they implement a project to aid all the countries worldwide to face this crisis. In this project there were three clusters and they attacked the contactless solution, the seamless connectivity, and the collaborative solutions. In the case of Latin America, they cover many countries and as well they work with the Association of Caribbean States. They were really affected because of the isolation, together with the landlocked countries, Bolivia and Paraguay. They were really, really, really affected, so they were working together and in that moment they gave technical assistance to several countries and they cover different topics as inland waterways, global airship, in that moment they organized together with ESCAP the implementation of airships for isolated countries, it’s a mode of transport that could be used, and they made some analysis of the regional distribution of vaccines and technological policies. They advanced one of the things that we are sure that the COVID crisis accelerate all the digitalization in many countries, all the civil security, the diagnosis of digital infrastructure, smart logistics. So we cover many, many countries. many topics, and in general UNTAD and all the commissions at the beginning with the respective region, they made an assessment of the situation. When they have the assessment, they made some recommendations, and then they implement the recommendation through technical assistance with the countries, and they provide these policy recommendations, and after they make capacity building. So it was a great lesson, the pandemic, and then when everything was, we thought that it started to stabilize, Ukrainian conflict with Russia arrived, now Gaza, so now we are living constantly in several crises, so we have to prepare our countries to be more resilient in all these dimensions now, and more sustainable. Thank you very much.

Alan McKinnon:
Good point, they always say never waste a good crisis, so the systems that you’ve put in place will be able to deal generically with all sorts of future shocks, isn’t it? I’m sure the same applies to supply chains in different parts of the world as well. So that’s great. So thank you for all of these comments. I’ve got a few other questions I would like to pose. One is the future role of technology in all of this. If we’re trying to combine sustainability and resilience in the way we manage our supply chains, broadly defined, I mean this could be from a corporate perspective, it could be from a shipping line perspective, or a government perspective, are there technological developments you see on the horizon which will make it easier to achieve this balance of sustainability and resilience? John, have you any thoughts on that, or anyone else who?

John Manners-Bell:
Yeah, absolutely. I think, and this probably relates a little bit to one of the topics we talked about this morning in my session, digitisation and the disruptive impact which that can have on flows of goods. Why is digitisation important? Well, it could enable the movement of shipments across a region, it reduces the friction at border, and that has an impact, an environmental impact. I think one of the figures I’ve seen published, I think by the WTO, was that if you were able to reduce friction at a land border, then you reduce carbon emissions at that land border by 85%. So that’s a win-win. If you talk about digitization and creating visibility at different tiers of the supply chain, that’s hugely important as well, enabling any player within the supply chain to have a look at the environmental practices of Tier 3 or the ethical practices of Tier 3. So technology has a really important role to play in all these factors.

Alan McKinnon:
And also AI, I think, is increasingly being deployed. Organizations like, I think, EverStream Analytics and Resolink and so forth are using machine learning and AI to try to predict future shocks to supply chains as well. Darwin, did you want to add something on this side from a port perspective?

Darwin Telemaque:
We have been working on a project with the IMO, which is the implementation of maritime single windows throughout the Caribbean, and here is a perfect example of collaboration that yielded great fruits. With the country of Norway, we were given the training, the technology, we developed in Antigua and Barbuda the first maritime single window in the Caribbean. Today, we have agencies training to roll out that maritime single window, and within the next four weeks with the IMO, we will be rolling out the maritime single window through all of the OECS. and other PMAC ports. So we’re going to be doing that very, very soon with the IMO. Now, we got that support from Norway for free, and we are extending the benefits to all our ports the same way. There’s no charge. Our people go in, we help get it implemented, and we’re hoping that that works. What does that do for us in an era where efficiency and resilience and sustainability of supply chain is an urgent need? It means that ships who would normally take an hour, two, or three hours to be cleared can now be cleared electronically three miles out. So a region where officers and other people would require six to eight people to board the ship and sit and have a drink, all of that goes out the window. And in almost the next few weeks in Antigua, there’ll be no one boarding the ship. It will be done digitally, and then we’re going to replicate that across the region. So there is an example of how, with goodwill, a bit of collaboration, we can do great things. And we’re about to do that with this implementation of this digital format. And the next step being that we’re going to link this maritime window with all the ports so we can see when the ships are cleared across the region so that we can now have, for the first time, a connectivity that builds greater efficiency, greater resilience, and sustainability. I said a few words just now. The IMO helped us. Norway helped us. So if we can continue getting some help, we can continue doing great things in regards to some of the challenges we have.

Alan McKinnon:
And Zera, in the course of your work, I suspect digitalization must feature quite prominently. I mean, working with MERS customers to help them secure their supply chains. Is that right? So am I right in thinking that?

Zera Zheng:
Yes, absolutely. I think to MERS digitalization and also the use of these new emerging technologies. technology is definitely important. Also I want to link to what John just mentioned about these regulations and on the compliance and to push really the full visibility of a supply chain to ensure you know your suppliers and now that your directorship or consignee to also be on the tier 1, tier 2, tier 3 to also make sure they are complying with the relevant regulations. Actually if you think about these bigger companies and like automotive company they probably if you just think about their tier 1, tier 2 it’s already goes to 6,000 7,000 companies but then actually these are countries and the regulations is even to push further. So if you look at it the entire supplier pool alongside you know this supply chain that even can go beyond 50,000 suppliers in total. So with such huge amount of suppliers how you can really recognize and also how you can manage these compliance and to make sure that they comply with the relevant regulations in the import and export and meanwhile also that will not create any issues or chaos to your supply chain to keep your cargo moving. That’s actually a challenge. Now inside Morosco we are also working with some digital partners and to actually come up with the solutions. We also have the capabilities to really help our customers to first also identify who are their supplies alongside their entire production journey. It’s not just about you know their material sourcing or supply. It’s actually really goes into the first place. So who for example if you think about the shoemakers actually so it’s really goes to okay who’s their rubber and who’s provided the rubber to your manufacturers. This part of intelligence and these are part of visibility is exactly what we see these disruption things and these are new regulations is a push the customers into to have. If it was just a think about the US Forced Labor Law Act it’s actually it’s really demanding on that. for any cargoes and you’re sourcing from certain regions, and actually you have to make sure, first, that you are not on their blacklist. So how you can ensure, even not your direct suppliers and not your shippers, how you can ensure that the rubber supplies also are not on their blacklist. So actually you need really the technology to help you achieve that. So I think from that part, it’s also I see definitely digital tools and also the new technology will play a more important roles.

Alan McKinnon:
Yeah, great point. I’m not sure if Jeff is still here from McKinsey, but McKinsey did some surveys a few years ago. They reckoned that I think 40% of COVID related disruptions were above the second tier in the supply chain, but only 2% of businesses knew anything about the supply chain above the second tier. So hence the need for that information. One second.

Zera Zheng:
Okay, it’s working now. Thank you. Also just to add an additional comment about the case I just shared, the shoe maker, right? If you think about it, in 2022, actually there’s a bigger flooding that happened in Malaysia, hitting the Tangier-Peloponnese port, right? So that’s happening, as I record, around November or December. Actually, interesting thing is three months later, around February, then quite a few of our lifestyle customers who are the shoemakers, and they’re actually sharing with us that their factories suffered from these hiking rubber costs, rubber price, because of these floodings in Malaysia three months ago. So also you can see that these specific climate change things, all these specific disruptions, how this impact actually passed on through this supply chain. So if you are the lifestyle, so if you are… are these big brands of shoemakers? If you think about, OK, if you just look at who are your shippers and also looking at their disruptions, you probably will neglect the rubber part, right? But indeed, it will give you a huge impact in future. And also, this is really affect their cargo readiness. So this actually also push all the customers, all the countries, all the players alongside the supply chain to have a better visibility, not just to know who’s your shipper, not just to know who’s your consignee, but also really to have the full visibility about who really provide the critical materials alongside the entire supply chain and who actually is a contributor in this part.

Alan McKinnon:
Our time is almost exhausted. So I introduced technology and digitalization. One other thing we should maybe mention briefly is geopolitics, which obviously is greatly influencing supply chain worldwide and will be affecting this relationship between sustainability and resilience. Coming from the UN, Miryam, do you have a perspective on how geopolitical developments in the world are affecting this interaction between sustainability and resilience?

Miryam Saade Hazin:
Thank you. Yes, we have lived with the COVID crisis, with the Ukrainian crisis. The world is changing, and we are going more to the integration. We are looking, because of this, because of the disruption that the geopolitical crisis have affected, we now are insisting in promoting the integration. The integration of countries in order to avoid that. And in the maritime sector, as I mentioned. in the morning, due to the geopolitics and in the climate change, all the vessels that they have to take longer ways, so they are polluting more, and before they were diminishing the speed, now they have to increase because they have to. So the geopolitical is impacting a lot of the maritime sector. I would like to add something that we have learned a lot, and now we are starting a new project with UNTAD and ESWA about food security. Due to the crisis of food, energy, and finance, all that causes this, we are starting a project in the Arab region, with Lebanon and Morocco, and in the Caribbean with Barbados and Trinidad y Tobago, in order to help these countries in all the supply chains of the food. So I think we have learned now, now we are not in the position as we were in 2020, no, and so we are trying to enhance national actions and to give some policy recommendations, and I see the time’s up. Thank you.

Alan McKinnon:
So I think you’ll have to report the results of that work in two years’ time in Saudi Arabia, the next UNTAD forum, okay? So you’re right, our time is exhausted. I mean, I’ll maybe take 30 seconds just to wind up the session. A lot of great contributions, so many thanks to the panel for that. Thanks, John, for introducing the social dimension to sustainability, which is very often overlooked. We obsess about climate and emissions, but we need to look at the impact on people as well. Thank you very much, Darwin, for introducing CII. I haven’t heard that discussed in any of the other panels, and it’s a very important issue, really, particularly for this region and elsewhere. So hopefully you’re pleased we’ll get some response. And thank you very much, Miryam. for talking about the past work you did with Covid and this now future work you’re about to do on supply chain resilience. And then thanks Zera for the MERS perspective on all of this. A feeling I’ve often had is that many shippers want to pass the buck, you know, both as far as decarbonisation is concerned and resilience. We’ll leave it to the logistics provider to deal with the problem but at least what you’re doing is actually trying to work with your customer base to put together joint resilience strategies. So I think that’s very good. So I hope you found that session of interest. Please give a round of applause to our panellists. Thank you. And enjoy the rest of the event.