Innovation and the law: legacy v efficiency and optimisation

Ahead of the Court of Appeal’s hearing of the appeal of Glencore International AG v MSC Mediterranean Shipping Co SA and Another [2015] 2 Lloyd’s Rep 508 in February 2017, Dr Meixian Song and Professor Mikis Tsimplis consider innovation in shipping and commerce and the law.

Shipping is notoriously slow in taking up innovation and reacting to technological and environmental challenges. This is often attributed to the large investment a ship represents and the associated recognition that some leeway should be permitted for old ships to complete their life cycle before new, more efficient ships are brought into service. In addition to the delays in deploying efficient ships, shipping also suffers from systemic inefficiency characterised by a market very sensitive to excess tonnage and with money made on delays in and outside ports, with ships speeding up to arrive early and earn demurrage, in some cases more valuable than freight, despite the knowledge that there is congestion at the port of destination.