Polys V. Hajioannou: Innovative technologies are transforming the global shipping industry

With decarbonisation and technological innovation reshaping the maritime industry, Safe Bulkers Inc. has taken proactive steps to ensure its fleet remains competitive, efficient and environmentally compliant.

Safe Bulkers CEO Polys V. Hajioannou discusses the company’s strategic initiatives, including its investment in dual-fuel vessels and support for the next generation of maritime professionals.

According to an S&P Global report, the cost of decarbonising maritime supply chains – estimated at over $1 trillion – could discourage carriers from making the necessary changes to reduce their carbon emissions. Another UNCTAD report suggests that full decarbonisation by 2050 will require massive investment and could lead to higher maritime logistics costs. Given this context, how does Safe Bulkers approach fleet management and modernisation to ensure both profitability and environmental compliance?

At Safe Bulkers, we have invested timely in the low part of the market by building a resilient, sustainable, growing company. We believe that making the right long-term investments that meet the future climate targets of our industry will allow us to secure a stronger position in the years to come and to continue enjoying the trust of our investors and all stakeholders. Ahead of increasingly stringent environmental regulations, which include the IMO’s greenhouse gas emissions (GHG) reduction targets for international shipping, we have been working actively on reducing the environmental footprint of our fleet and carefully monitoring developments, while extensively evaluating the use of technologies leading to net-zero GHG emissions. In 2023, we made significant progress in improving our fleet’s emissions profile, achieving a 7.42% annual reduction to our fleet’s carbon intensity based on Annual Efficiency Ratio (AER) compared to 2022. As part of our extensive fleet renewal programme, we signed contracts for the acquisition of two dual-fuel newbuilding Kamsarmax dry-bulk vessels, capable of operating with methanol and conventional fuel. These vessels, when powered by green methanol, can produce close to zero GHG emissions based on the life cycle assessment (LCA) methodology well-to-propeller (WTP). Like all our newbuilds, these dual-fuel vessels are designed to meet the future requirements of IMO regulations, especially those relating to the reduction of greenhouse gas emissions (EEDI - Phase 3), as well as those related to nitrogen oxide emissions (NOx-Tier III). Following the recent deliveries of our first ten Phase 3 newbuilds, Safe Bulkers has an outstanding orderbook for eight newbuild dry bulk vessels (EEDI - Phase 3, NOx-Tier III), including the aforementioned dual-fuel vessels, with prompt scheduled delivery dates: two in 2025, four in 2026 and two in the first quarter of 2027. Like the first ten newbuilding vessels, all the newbuilds will fly the quality Cyprus flag, enhancing the Cypriot Registry with the most advanced green ships of the global market.

What key skills will future professionals need as the industry shifts to automation and digitalisation, and how do your scholarships support this?

At Safe Bulkers, cultivating highly educated young talents, equipped with the academic skills necessary to join the country’s future workforce, is a strategic priority that will further attract international shipping business to Cyprus and expand the country’s maritime cluster. To this end, in 2021 we introduced our annual scholarship programme for Cypriot or Greek students in Cyprus wishing to pursue a professional career in the maritime industry. For the 2023-2024 academic year, we awarded 10 scholarships of €10,000 each to undergraduate and postgraduate students undertaking studies relevant to the maritime industry’s needs and we have awarded the same number of scholarships for the 2024-2025 academic year. We have also launched the Safe Bulkers Annual Cadet Scholarship Programme, which grants five annual scholarships of €5,000 to Cypriot or Greek students enrolled in the four-year Nautical Science programme at the Cyprus Maritime Academy. The scholarships will be renewed annually subject to the recipients’ satisfactory academic progress and successful promotion to the next year. Safe Bulkers will provide them with sea-service training onboard its modern, energy-efficient, Cyprus-flagged vessels and, upon graduation, full employment leading to a career as Deck Officers up to Captain Class A and prospective placement as Port Captains or fleet operators in the marine department of its Cyprus-based offices. More information about our scholarship programme is available on the Safe Bulkers website.

How do you think the global energy and fuel transition will influence the design, technology and operational practices of bulk carriers in the shipping industry over the next decade?

For decades, innovative technologies have been transforming the global shipping industry, leading to significant changes, especially in ship design and building, with a fundamental impact on onboard commercial and operational performance. Committed to progress, we at Safe Bulkers have always focused on how to evolve, by incorporating innovative solutions and technologies into our daily operations and practices. Taking the pulse of global shipping trends, we have been working actively to scale up the efficiency and effectiveness of our operations while enhancing our competitiveness and resilience for the future. We stay informed about emerging technologies while continuously assessing, testing and implementing tech solutions for better operations, more efficient decision-making and increased cost-efficiency within our company. Our ongoing installation of data collection and analysis systems is a significant asset in our company’s digital transition. We have placed control systems on board our ships and in our offices to ensure the safety, efficiency and continuity of our businesses and we are continuously alert and educating crew members and shore personnel through continuous training to ensure that cyber risks are properly identified, assessed, monitored and reported.

How do territorial disputes and geopolitical tensions impact Safe Bulkers’ operations and the overall demand for dry bulk shipping? What measures can be taken to address this?

Shipping is inherently an international sector. As such, the industry is often exposed to geopolitical risks with a wide range of supply chain disruptions and an immediate impact on global economic activity, trade flows and prices. Over the past few years, geopolitical risks have loomed large for the global shipping industry. A mix of trade tariffs, restrictions, disputes and political rivalries is hitting the industry hardest. An array of geopolitical challenges – the ongoing disruptions in the Red Sea with increased cargo travel distances and costs, the Russia-Ukraine war and the multiple sanctions against Russia, the COVID-19 pandemic, as well as the imposition of trade and economic sanctions – has weighed heavily on the international shipping industry, causing massive shifts in global demand and supply dynamics. In addition, Cyprus shipping has to deal with the illegal Turkish embargo on a European flag such as that of Cyprus and on Cyprus-managed ships, heightening the challenges for shipowners and operators. These challenges can be tackled only by enhancing Cyprus’ standing in Europe and globally. To achieve this, it is crucial to step up our efforts towards further strengthening the Cyprus Registry and Flag; we need a strong Flag to have a stronger voice both inside and outside Europe. Our voice will not be enough if not backed up by more Cyprus-flagged ships. At a time of mounting shocks and disruptions to the shipping industry, maintaining the freedom of navigation should be the core focus across the global maritime community. This, of course, requires coordinated action and an even stronger uniform voice against the sector’s barriers to free trade corridors. So, the challenge becomes how to further deepen collaboration across the sector and amongst all stakeholders in order to create the scale and build the momentum needed to deal with these crises.

Can European ports keep pace with the growing digitalisation of ships in the dry bulk sector? Are these ports becoming more intelligent and responsive to the demands of modern shipping technologies?

The EU has been at the forefront of the global climate change with a clear commitment to become climate-neutral by 2050. To ensure the European maritime industry’s green transition, ports across Europe are transforming, investing heavily in green infrastructure, clean energy technologies and eco-friendly practices, and building on sustainable development while still maintaining their economic efficiency. Green port initiatives have been implemented at numerous ports, focusing on reducing their environmental impact and improving energy efficiency. At an international level, green efforts by ports are growing and helping the industry go greener. However, decarbonising shipping requires a lot more; cross-sector collaboration, strong regulatory alignment and technological breakthroughs as well as massive global investment to provide new types of fuels to support the net-zero future are of paramount importance.

What is your vision for Safe Bulkers over the next five years?

As we continue to grow, I am confident about the future prospects of our company. Safe Bulkers has a strong foundation, which combines a great team of people, a modern fleet with high specifications, long-lasting world-class partnerships and a solid corporate strategy, on which we can build further and evolve, capitalising on new opportunities and delivering profitability even in volatile markets. Safe Bulkers has invested – and will continue to invest – in its environmental agenda, making sustainable long-term investment decisions that will help us ensure our business resilience and competitiveness for decades to come. To deliver on this, we are focusing on two strategic priorities: (i) our comprehensive fleet renewal programme, by ordering new, modern vessels while acquiring younger secondhand vessels and selling some older ones, and (ii) our ongoing programme for the environmental upgrading of existing vessels with newer eco-efficient technologies during their dry-dockings. At the same time, we aim to maintain a comfortable leveraged balance sheet with strong liquidity, directing our free cash flows partly into our investment programme and partly to reward our shareholders. From a position of stability with low leverage, substantial liquidity and hands-on operational efficiency, we are prepared not only to address any future challenges but to capitalise on all new opportunities that may arise.

This Special Feature first appeared in the October edition of GOLD magazine. Click here to view it.