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Kurt Nickish
You're listening to Is Business Broken, a podcast from the Merotra Institute for Business, Markets and Society at Boston University Questrom School of Business. I'm Kurt Nickish. From cars on the road to airplanes above, a lot of the conversation around climate change focuses on how we move. But there's another system, mostly invisible to consumers, that moves nearly everything we use, including those cars and planes. Ocean shipping carries close to 90% of global trade, and it accounts for about 3% of global emissions. The International Maritime Organization has set ambitious targets to reduce those by 20% by 2030, by 70% by 2040, and reaching net zero by 2050. Ships are expensive and pay for themselves over decades, and the technology for green fuels is still developing. What are you supposed to do if you're a shipping company? Do you invest early and take on the risk? Do you drag your feet? And why should we be thinking about the shipping industry in the first place? To start this conversation, I want to introduce someone who has been running ships for decades.
Ravi Marotra
No country on its own today is self sufficient. It has to trade with the rest of other countries to make a standard way of life.
Kurt Nickish
Ravi Marotra founded the Foresight Group in 1984 and today helps manage a global fleet of ships. He's also the name behind the Ravi K. Marotra Institute. And he wanted to start this conversation by grounding us in why this industry matters.
Ravi Marotra
The world is eight and a half billion people are spread over seven continents. They have to travel trade among that
Kurt Nickish
global trade is the reason why coffee from Brazil and Colombia is available at your local Starbucks. And why there are bundles of bananas at the neighborhood convenience store. And if we're going to participate in global trade, shipping by boat has advantages.
Ravi Marotra
Not only it is the cheapest operation and is the safest operation.
Kurt Nickish
A single cargo ship can carry tens of thousands of tons at once, far more than trucks or planes. And security is a real consideration too. Ships experience fewer stops and transfers, reducing the chances of handling damage or theft.
Ravi Marotra
So the shipping was there centuries and it will remain there in the future.
Kurt Nickish
Shipping keeps the global economy moving. The question now is how do we keep those goods moving while cutting the industry's environmental footprint?
Ravi Marotra
There are two things. One is improve the combustion of the fuel, which we are using fossil fuel. So the only thing shipping can do for cleaning up is to improve the burning of the fuel in the engine. Also the design of the ship so that it consumes less for the same distance.
Kurt Nickish
Today, most engines run on a fuel oil called bunker fuel, which is high in carbon and sulfur. It's cheap and energy dense, which is why the industry has relied on it for decades. But it also produces significant greenhouse gas emissions and air pollution. The question is, what comes next.
Valerie Thomas
Currently deployed, the low carbon fuels are liquid natural gas, lng, which is increasingly used.
Kurt Nickish
That's Valerie Thomas. She's a professor of industrial engineering at Georgia Institute of Technology.
Valerie Thomas
About half of the bunkering ports now are capable of supplying LNG ships and also fuels made from waste oils and animal fats. So those are out there, and the LNG is very cost effective. Sometimes it's even cheaper than the very low sulfur fuel oil.
Kurt Nickish
Lng, liquefied natural gas and fuels made from waste cooking oils and animal fats are the two low carbon fuels already in use today. But here's the catch. There's only so much of it. Even if every drop of waste oil were redirected to shipping, it still wouldn't be enough to power the global fleet. That's why Valerie and other researchers are looking at biofuels as the next frontier.
Valerie Thomas
Some of the biofuels are chemically very similar to these kind of heavy diesels that are used in ships. And so they can be directly mixed. And that's one of their advantages, that if you've got it, you can mix it in, but they're not really cheap enough.
Kurt Nickish
For now, Valerie says that if biofuels are made in tandem with other products, the cost could be worth it. Think about how a regular oil refinery works. It doesn't just make gasoline. It makes plastics, chemicals, and other high value products on the side. So researchers want to do the same thing with wood waste, like branches, limbs, sawdust, and timber scraps. Basically, Valerie says it's possible to build a biorefinery that turns that raw material into fuel and some other higher value products at the same time.
Valerie Thomas
If we can get biorefineries to work that way, then it's great. Fuel is always going to be a low margin product. You want to pair it with something that's high margin. So that's a really good approach that's being developed.
Kurt Nickish
Beyond biofuels, Valerie says there's another category getting a lot of attention, and that's fuels made from hydrogen, including green ammonia and green methanol.
Valerie Thomas
We're working on both producing the hydrogen at low cost, but also moving it around and figuring out what's the best supply chain. Do you want to make it on site where you need it? Do you want to make it in a more centralized place and have a supply chain? So that's the Work that's going on in the lab.
Kurt Nickish
In the lab, there's no shortage of ideas that work. But what works in a small building is very different from what works on a giant container ship at sea. It's not just about what you burn, it's about whether your ship can burn it efficiently. And Valerie says that switching fuels isn't as simple as filling up with something new.
Valerie Thomas
For the lng, liquefied natural gas that's used now, you can't just drop it in. And so even for lng, it's a substantial retrofit to the ship. It's about an additional 30% cost to retrofit the ship. And the same will be true for these other fuels. Certainly it will be true for a nuclear ship. Nuclear is definitely a viable low carbon technology.
Kurt Nickish
Next generation nuclear technology is considered a promising zero emission alternative for shipping, but it's also heavily regulated.
Valerie Thomas
You want safety, you need security, and then you need regulatory clarity. However, technically there are nuclear powered ships, there are nuclear powered submarines. So it's technically a completely developed and not even new technology. We've been using this for decades.
Amulia Mohapatra
With anything coming to new technology, whether it is green ammonia or green methanol, the infrastructure to be built up across where, geography, where the vessels are trading.
Kurt Nickish
That's Amulia Mohapatra, vice president and head of shipping at Foresight. He works with Ravi, Foresight's founder to oversee vessels operating around the globe. In a year, the company's ships burn about 300 million tons of low sulfur fuel. And Amulia says greening the entire fleet will take installing the right infrastructure at the right cost.
Amulia Mohapatra
From the business perspective, the cost of the fuel has to be also very rational. You know, like currently the green ammonia someone is selling at $2,500 per ton, compared to $500 for the low sulfur fuel. So almost more than five times. It doesn't make any economic sense for a ship owner or attract that on top of that ship owner and the engine manufacturer, they have to run in tandem so that the entire burden doesn't come to the ship owner itself. For the existing fleet, we have to reduce the emission by putting some intermediate measures, you know, like putting some efficiency devices on the existing fleet so that you can move with the milestone of 2030 target of having 5% of you know of your ships burning to low carbon fuels or carbon neutral fuels going forward.
Kurt Nickish
For now, Amulya says the Foresight group's focus is clear. Improve what exists and then wait for the rest to catch up. But that leaves a critical Question when does it actually make sense to switch? To understand how big this transition is, I turn to Chris Wernicke. He's an independent industry consultant and the former chair and CEO of the American Bureau of Shipping.
Chris Wernicke
But I wanted to kind of talk a little bit about kind of what is happening kind of at the deck plate level, because I will tell you the what's ahead of this industry is a pretty significant challenge. Just to throw some numbers out. If this industry wants to get to net zero by 2050, what that means by 2050 you have to have a carbon mix, which is about 70% zero carbon fuels, which means you have to have 10 times more renewable energy. And you need a 30% carbon neutral fuel. So 70% zero carbon fuel, 30% carbon neutral fuel. In order to get 30% carbon neutral fuel, you need 100 times more carbon capture. So that gives you a little bit of the sense of the steepness of the curve that the industry is facing.
Ravi Marotra
Now.
Chris Wernicke
When you talk about what's going on at the ship level, 70% of the problem is in the fuel. So you have about 30% that the ship owners right now can be doing to improve their fuel consumption using different types of technologies. Everything from slow steaming to waste heat recovery, to looking at air lubrication, to doing upgrades on propellers and rudders, looking at advanced coatings, using AI for basically voyage and performance optimization. So you have about 30% of the fuel consumption problem they can handle right now.
Kurt Nickish
So given that 70% of the decarbonization challenge is fuel, what can a shipping company do about that? What is the market supposed to take care of and how does that play into company strategy?
Chris Wernicke
Now when you talk about the fuel, you have to remember there are three boundary conditions that are really driving this. It is not about one fuel fits all. It is about multiple pathways that are going to be driven by combinations of technology readiness, timelines, ship type, and quite frankly, whether it's in the combustion engine, whether you're talking about ammonia or methanol, or whether you're talking about things outside of the combustion engine, which is electrification and nuclear. All this has to come together so the owners actually can really manage and control one out of the three boundary conditions. They don't control the availability, scalability, maintainability of fuel and they don't control infrastructure. Best thing they can do is control safety and the beginning of the integration. So commercial gravity alone is not going to get us there. It's going to be probably a new type of public private relationship and governments are going to have to to some extent step in to help because I believe success going forward is definitely going to be a team sport.
Kurt Nickish
So what does this team sport, all this coordination actually look like in practice? Fuel availability, infrastructure, demand signals. These are systemic challenges that no single company can solve alone. And that's exactly where BU Questron professor Justin Ren focuses his work.
Justin Ren
I'm a supply chain researcher, so as opposed to the technology things we're talking about about, I primarily look at how do we design a system that make best use of technology and how do we coordinate.
Kurt Nickish
Justin offers a parallel that's easy to picture. Think about electric vehicles. Many people didn't start buying them until they could see charging stations on their route on their map on their app. The technology existed, but adoption waited for the infrastructure. Justin says shipping faces the same problem. You can build the cleanest engine in the world, but if the fuel isn't at the port, the ship doesn't change. So what does good coordination actually look like? Justin says there's actually a success story in a recent supply chain failure.
Justin Ren
Let's first look at a picture that we've seen so many ships during. COVID was parking at port of la, right? That is coordination failure. So there's many points of failure, but it just happened at the same time. And I think we quickly recovered and that's a success story. We know that there are many points of what you call weakest link, so you got to address them one by one. Again starting with coordination. How do you have a good demand signal? So not a lot of ships want to do say panic shipping, panic buying. So that's one. I think we are getting better using AI, not only in demand forecasting but also in fuel optimization. Better use, let's say weather forecast to on a real time basis, adjusting your shipping routes or decision speed, so on and so forth.
Kurt Nickish
Of course we know that Covid isn't the only disruption reshaping global shipping. Right now, geopolitical shocks are doing the same thing. And foresight has a front row seat. It's headquartered in Dubai, a strategic hub at the center of Middle east trade routes that have been thrown into disarray by war and regional conflict. Layered on top of that are higher tariffs globally, which have rerouted trade flows, lengthened routes and added unpredictability to the industry. So I brought the question back to foresight leaders Amulia and Ravi. When the world keeps throwing disruptions at you, does that set back the decarbonization clock or does it make the case for change even stronger?
Amulia Mohapatra
So these two created a havoc between Two geographies when these tariff issues came. Our main trade route, China being the largest exporter of the goods and us being the importers, it really created a lot of turbulence in the commercial shipping. So some negotiation happened, but it is temporary. We have to have a permanent solution going forward to have a long term view on that and towards this disruption in Middle east. Of course, 3200 ships are stranded in the Persian Gulf itself. So it is reducing the efficiency of the entire shipping. Economics and the trade. 12 billion tons of trade globally in all the ships it will get impacted by certainly and it will increase the inflation and all microeconomic point of view. Decarbonization is inevitable. It has to come globally. We emit about 30 odd gigatons of greenhouse gases out of which 1 billion ton is only by shipping. So we are the frontrunner to decarbonize in the industries. So we have to get that into the map. Whether it is a geopolitical turbulence or any trade barriers happening due to tariff or non tariff barriers.
Ravi Marotra
I want to give to the audience the sense of enormity of the issue of this. Remember we were running the ships in the first World War with the coal. And from coal to oil it took nearly 25 to 30 years to switch over totally. When we are talking of changing to the neutral fuel, that is what is minimum time it will take. I don't think easily it will change. And it is a privately owned industry. So it will be very difficult unless something made which is very economical to run it as it became from coal to oil. Otherwise no ship owner will try to take that because it's a liability. Once you take and you get stuck, no transition is smooth. It will take years in between. People will do, as already mentioned, use the ammonia, this. That is all okay, but these are not long term solutions.
Kurt Nickish
Yeah, Justin, can I just come back to you because I know you study geopolitical risks and shocks as well. And can you weigh in on how that impacts this large challenge that we're really getting a strong sense of?
Justin Ren
There are definitely disruption happening everywhere and I think there are various ways at different levels we can mitigate or counter that. But first of all, I think it's probably opportunity for us to think about how to change the carbonization game. What Ravi said earlier, how do we find innovative ways to help the shipping industry, which are primarily privately owned and we are studying several in general in the transportation sector. Other countries are coming up with innovative models to reduce the risk on the private sector by for example, publicly funding part of the infrastructure Right. The idea of getting back to the coordination, it's about share the pain, share the gain. So a lot of work to do.
Kurt Nickish
At this point. We've heard about the scale of the challenge. We've heard how long fuel transitions take. Historically, we've heard about geopolitical shocks, infrastructure gaps and the limits of what any single company can control. I wanted to ask whether net zero by 2050 is technically feasible or is it just an aspirational target designed to get the industry moving in that direction? This was the reaction from Valerie at Georgia Tech.
Valerie Thomas
Net zero is feasible. We have multiple pathways to get there. We've been talking about biofuels which need to be made very carefully to be low carbon. Also a lot of these hydrogen based fuels and then there's nuclear is technically feasible? That's a very simple question. Will we get there? Will it all be deployed? We're going to see. I just want to add in there that yeah, we've talked a lot about the difficulties for shipping in getting to net zero. This is not the only thing that's going to be going on. Aviation is seeking to do the same thing, maybe even faster. And the other uses of petroleum are all transitioning, you may think. And in some ways that makes the problem even bigger. There are other ways that it makes it easier. Some of the fuels that are used for shipping are very similar to those used for aviation. So as infrastructure gets built out, shipping can benefit.
Chris Wernicke
You know, one of the challenges in the industry right now is the ongoing discussions and debate in IMO relative to what exactly is going to be the framework going forward to get us to 2050. The ship owner cannot do this on its own. Valerie made a very good point. You know, you're going to have a lot of competition for fuels, you know, between other sectors. And where does actually the shipping sector fall into this?
Kurt Nickish
Ravi and Amulia, what's realistic from your perspective, from where you sit?
Amulia Mohapatra
Ambition is there, but we're still looking for a clear pathway, you know, and as existing ship owners, we are doing our best to whatever way to reduce the emission towards the decarbonization by using eco type engines, putting improvised coatings on our ships and reducing the emission.
Ravi Marotra
At present, I want to end this with a positive note. If any industry which will reach to zero neutral is the shipping because once the job is known, they get on with it. The timeline is not known because only industry has the technical institutions have to develop and its economics has to develop. The scale has to come out. We are commercial by nature. Shipping is very commercial. If you don't sell the goods at the other end. At the cheapest possibility, people will not buy is a partnership between the exporter and the ship owner. So they always go for the best solution possible.
Kurt Nickish
That's my conversation with Ravi Marotra, Amulya Mohapatra, Chris Wernicke, Valerie Thomas and Justin Ren. After talking with them, one thing is clear. The science is not the bottleneck. Valerie was definitive. Technically we can do this. Between green, ammonia, methanol, next gen, nuclear and so on, the map for a net zero ocean is on the table. The real wall is coordination. Chris laid out this trifecta of a dilemma. A shipping company will only order a green ship if fuel is available. It has to be affordable and the infrastructure has to be built for you to be able to refuel around the world. Right now those boxes are not checked. And as Justin pointed out, that's a systemic challenge that no single CEO can solve. It's going to take a new kind of public private partnership, the kind we've seen work in electric vehicles. And then there's history. Ravi reminded us that the last great fuel transition in shipping from coal to oil took 25 years, and that was driven purely by economics. The wind of profit was blowing in the right direction. Today, shipping companies are trying to transition faster under regulations that are still evolving. And with green fuels that Amulya says cost five times what the market will currently bear, it's not that the industry is failing, it's that the market forces we usually rely on aren't enough. Thanks for listening to Is Business Broken? If today's episode changed the way you look at a cargo ship or the goods on your shelves, share it with the decision maker you know. And please take a second to rate and follow Is Business Broken Wherever you get your podcasts. Thanks for listening. I'm Kurt Nickish. Sam.
Podcast Summary: "Does the Future of Sustainability Lie in the Shipping Industry?"
Is Business Broken? — Questrom School of Business (Ravi K. Mehrotra Institute) Episode Date: April 23, 2026
This episode delves into the massive, often overlooked role of the ocean shipping industry in both enabling global trade and contributing to climate change. Host Kurt Nickish gathers leading voices in shipping operations, engineering, economics, and policy to unravel how an industry responsible for moving 90% of global goods—and accounting for 3% of greenhouse gas emissions—can reconcile its essential economic function with aggressive decarbonization targets set by the International Maritime Organization (IMO).
Shipping is the backbone of global trade, linking continents and supplies (01:18).
Shipping’s infrastructure and fleet are designed for decades of use, complicating transitions to green fuels (00:53).
Current Low-Carbon Options
Infrastructure & Cost Barriers
Converting ships for new fuels is expensive—retrofitting for LNG adds about 30% to ship cost (06:12).
Next-gen nuclear: technically established (naval subs, icebreakers), but faces regulatory and safety barriers (06:38).
Quote:
Current realities:
Foresight Group position: "Improve what exists and then wait for the rest to catch up" (08:42).
Quote:
Chris Wernicke frames the challenge (09:05):
Multiple decarbonization pathways are needed, tailored to ship type, tech readiness, and region (10:49).
Technical solutions alone are not enough—governments will need to create enabling public-private partnerships; “Success going forward is definitely going to be a team sport” (11:48).
Justin Ren draws a parallel to electric vehicles: adoption lagged until infrastructure (charging stations) was visible; shipping faces a similar “chicken or egg” problem regarding cleaner fuel supply at ports (12:34).
Systemic coordination failures—e.g., pandemic port gridlocks—underscore the need for improved demand signaling, forecasting, and use of AI (13:13).
AI also supports fuel and route optimization to reduce emissions (13:38).
Memorable moment:
War and tariffs can cause massive delays, reroute global trade, and introduce unpredictability (14:05).
Despite increased inflation and inefficiency, disruptions may reinforce the case for strong coordinated decarbonization (14:47).
Quote:
The last shipping fuel transition (coal to oil) took 25–30 years—an example of how major change is inherently slow, even when market incentives align (16:08).
Shipping’s private ownership exacerbates risk-aversion and investment uncertainties, unless low-carbon is as cost-competitive as oil became (16:08).
Quote:
The conversation was practical, data-driven, and realistic yet pragmatic, reflecting both the ambition and the daunting complexity of decarbonizing the global shipping sector.
The pathway to a sustainable shipping industry is technically feasible, but the timeline, economic reality, and immense scale of coordination required mean that “success will be a team sport” between private industry and governments. Market forces alone will not drive the transition—the right policies, infrastructure, and industry-wide buy-in will be necessary to reach IMO’s 2050 ambitions.