Cargill Inc. raises standards for ocean-shipping industry

Cargill Inc., known for its land-based agriculture, is also a dominant presence on the world's waterways and is hoping to use its power position to clean up the ocean-shipping industry.

The Minnetonka-based conglomerate recently committed to reducing its greenhouse-gas emissions at sea by 15 percent in the next two years, but it's going to need help from its partners to achieve this.

The move was one of several goals outlined in a presentation to customers last month in New York, and follows a number of widespread initiatives aimed at reducing the environmental impact and improving worker conditions in ocean transportation.

Shipping is a major part of how Cargill fulfills its purpose of moving food around the planet. The company is one of the world's largest ship charterers, with 600 to 700 leased vessels floating in international waters at any given time. As consumers pressure food manufacturers to improve the environmental effects of their supply chain, many of these companies — which buy ingredients from Cargill — are looking for the agribusiness to help lower their carbon footprints.

It's a ripple effect that keeps going. Cargill doesn't own any of its fleet, meaning the owners of the ships that Cargill leases also need to change.

"We have a strong drive within Cargill to create sustainable supply chains, and shipping is a part of that," said Jan Dieleman, president of Cargill ocean transportation. "We are not the ones paying the crew, so that makes it sometimes a bit more complex. So we have to go through the owner."

Cargill partnered with nine nonprofit or trade organizations to develop the benchmarks outlined within a 25-page report the company will use to grade itself and its ship suppliers on issues ranging from port corruption to gender equality and invasive aquatic species.

While shipping is one of the more "environmentally benign" modes of transportation, the size of the industry means any reform could have a meaningful impact, said Carleen Lyden Walker, co-founder and executive director of the North American Marine Environment Protection Association.

In 2016, global ocean trade hit 10.3 billion tons, according to the UN's 2017 report. Each year, ocean transportation emits about 1 billion tons of carbon dioxide and is responsible for about 2.5 percent of global greenhouse gas emissions through fuel burn.

A renewed focus — both by international governing bodies and the food industry — is leading to several changes. The International Maritime Organization has set a 0.5 percent global cap on sulfur content for ship fuel oil, effective January 2020.

Today, ships traveling international waters can burn fuel with 3.5 percent sulfur. Those levels are "damaging to air and water," Lyden Walker said. "The bleaching out of coral is related to high sulfuric contents."

The U.S. and Canadian standard is already much lower. Ships traveling within 200 miles of the two North American nations must maintain a sulfur burn of less than 0.1 percent, Lyden Walker said.

Other ship operators from Duluth's Lake Superior harbor to St. Paul's Mississippi River port have retrofitted vessels with newer, more fuel-efficient engines.

Cargill's size gives it a level of influence that its leaders hope spurs the ocean transportation industry to a higher standard. The company is encouraging owners to install scrubbers — or cleaning systems for exhaust gas — and consider using liquefied natural gas, which is supposed to be cleaner and safer.

Beyond the company's environmental goals are its aspirations for better working conditions for seafarers. Dieleman said the safety and well-being of the workers aboard its leased vessels contributes to the success of each voyage, and ultimately, the company's bottom line.

About 2,000 people die annually at sea, a rate that is 10 to 12 times higher than on land. "It is a risky industry in that sense, so we are scrutinizing which ships we are chartering," Dieleman said.

There are a lot of accidents, with heavy equipment moving around and injuring workers, and collisions are still happening at sea. Seafarers often struggle with loneliness, cultural conflicts between shipmates and the threat of piracy.

But the company isn't doing this all just to be nice.

"All of these things pay for themselves. Some might be more obvious than others," Dieleman said. "The NGO [nongovernmental organization] partners understand this is not a charity event."

He added: "We are trying to find the things that are greener but make economic sense."