In this episode of Aronnax, host Craig Eason talks with Danielle Doggett, CEO of Sailcargo which is building a wooden cargo ship in the jungle of Costa Rica. The vessel will run up and down the west coast of the Americas when it is finished, carrying cargos for cargo owners, man of whom have signed letters of intent as they want o have a sustainable supply chain to match their sustainable products.
Article below and transcript of the show below that.
Show Transcript:
Craig Eason
Hello, and welcome to the Aronnax Show, a podcast about the shipping and ocean space. It’spowered by Fathom.World. I am Craig Eason and that is Danielle Doggett, the CEO of Sail Cargo a company she launched to do something very, very different.
This episode of the Aronnax Show is dedicated to the ship in the jungle. A wooden ship being built in a wooden shipyard on the coast of Costa Rica and destined to sail with sustainable cargoes by shippers seeking sustainable shipping up and down the west coast of the Americas.
I was drawn to the story of CEIBA, as the vessel will be known, not only because of the extremeness of the idea, but how Sail Cargo is going to sail in a competitive market, and according to Doggett’s plans make money.
According to the website CEIBA is a 46 meter three masted squared-rigged, wooden schooner. It’s cargo capacity is modest, the equivalent of 9x twenty foot container sunder the deck.
The vessel looks like a romantic and some will no doubt say foolish dream of returning to the past, but CEIBA will have a battery system on board to power two electric engines and have the ability to use its propellers while under sail power as turbines and generate electricity to recharge those.
I spent an hour on a Zoom call with Danielle, me in my home studio in Sweden and she in her wooden shipyard the jungles of Costa Rica, which is more than evident in the background noise throughout the interview.
I wanted to know how this carbon-positive plan would make money, and to dig into her plans for future vessels, which include fuel cells with the potential for onboard hydrogen generation and even other larger vessels which she is currently collaborating with other potential partners on.
But I began by asking Danielle about the challenges of not only deciding to build a sustainable ship, but to build a sustainable shipyard, and find cargo owners who really believe in sustainable supply chains enough to invest in them.
Danielle Doggett
Yeah, you’ve hit the nail on the head, as well add to that, that that’s this is approximately a $4.2 million project. And we started this with $10,000 Canadian, which is about $7,000. And that’s that was it.
Starting this with next to no financial backing actually made it more necessary for us to have the answers to every single question, to have planned better, to have a stronger foundation to have more, have done more feasibility studies, to have every everything figured out. Because we needed our investors to trust us. It’s not easy to say to somebody you’ve never met, ‘please send $20,000 to this account in Central America where I’m standing in a field’, and we have nothing to show for it. So we needed to have those answers.
It’s something important that you brought up, is that we are a for-profit business model, while we actually do maintain a lot of nonprofit organization goals and values. So I actually worked as a volunteer, or very close to volunteer for almost 10 years of my life, and so very familiar with the non-profit sector and very much in love with it. But that wasn’t the point of this business. So we wanted to say exactly as you said that we can hold up our numbers, and that, you know, it’s a much smaller scale, but hold up our numbers and the numbers beside Maersk or any other for profit shipping company. And we could say, look, we did it, we paid our taxes, we paid our investors, we paid our crew, and we did it, carbon negative. And so that was very, very important for us to be able to say that. And so we do have, as I said, values that are more traditionally associated with being in the nonprofit sector, which to me, this makes no sense why they’re associated only with that.
But it’s called a triple bottom line. So you care about the environment, you care about people and you care about financing. I do believe that the for-profit world is moving towards that a lot of people disagree with me. But it’s the only way to make long term financial sense. And so that those things are inherent in our business model.
Craig Eason
How do you see this then scaling up? You’ve got the CEIBA, which is is it still going to be launched next year? 2022? Is it still on schedule? How do you see that scaling up?
Danielle Doggett
Yes, we are actually still on schedule, which is really amazing to say, we’ll see if we’re on schedule when it actually gets in the water. But we are. And it’s very interesting. A lot of people think that CEIBA is a symbolic flagship, and that, you know, it’s it’s nice, but it’s not scalable, I would actually completely different disagree. And when I look at how can we decarbonize the maritime sector, we do look at scaling up, but actually, we really look at scaling out in all directions. And so here, for example, in where I live in the Gulf of Nicoya, it’s beautiful Bay in the Pacific in Costa Rica, we have an artesanal fishing cooperative here that has 90 boats, little open boats that are about five meters or 15 feet long. And this is, by the way, one of the poorest communities in the entire country, which is where we are located. And we’re looking at their little boats and saying, How can we decarbonize that industry, because that’s the entire Gulf, that’s what all those families depend on. So we are looking as small as little open boats, and we are looking as large as very large commercial steel vessels as well. So with CEIBA, what we want to do is prove the value of clean shipping, which actually, we’ve already done, that. CEIBA has already achieved permission, because we have so many letters of intent from cargo clients, that we could easily justify building a second ship of the same design. So we see the scaling in in all, all ways that the maritime industry is active.
Craig Eason
Tell me a little bit about the cargo side then, because I quite often hear from ship owners, that there’s a bit of a it’s not a tense dialogue, but let’s just say some of the stumbling blocks are often between what the shipping groups say they can do and what the cargo owners the charters say they want and are willing to pay. And there seems to be a bit of a standoff there, when you look at more traditional charter parties, when you look at the the the arrangement, the commercial arrangement that they have got between each other, that seems to be a bit of a stumbling block. But you’re saying here that you’ve managed to identify how have you managed to find so many cargo owners that are willing to fill the CEIBA and another vessel?
Danielle Doggett
Well, they’ve they’ve found us as far as I can understand, they’ve they’ve really found us. And it’s simple. They recognize that by eliminating their carbon footprint, they add value to the product, and that’s just a simple mental shift. And people have begun to to make that shift. And so when I can say to somebody, you know, this is one reason actually we identified Canada as an interesting place to go because for example, coffee does not grown in Canada, at any commercial scale whatsoever. Maybe somebody has a tree in a greenhouse privately but or plant rather. So, assuming that there is no coffee grown in Canada and I go to Vancouver, which Vancouver loves coffee. They’re massive coffee drinkers and if I go to a high end roastery that is, you know, say they have micro-lot biodynamic, Fairtrade, eco-packaging, organic, they’re they’re all the things, they are not carbon neutral, they are not carbon negative, not truly, they can offset it. But every single bean that’s brought into Canada has a carbon footprint associated with it. So if the roaster in Vancouver can say, ‘We are the first and the only carbon neutral coffee in the entire province of British Columbia’, that’s going to add value to the product.
Craig Eason
I mean, we’re not we’re not looking at a very large ship here are we and the cargo that you can carry is limited, but to balance surely being profitable for the cargo owners to be able to sail it on that vessel? Because are they then going to find that their prices are going to have to be higher as a result of putting something onto your vessel?
Danielle Doggett
Actually, absolutely not. It’s a surprising thing to say but no. On the route that we’ve been looking at, which is Costa Rica to Vancouver, if the end product, which is, you know, one kilo of coffee on the on the shelf, or 2.2 pounds of coffee, that would be somewhere in the range of Canadian $30- so call it C$20 to C$25 or so a kilo. Basically, they would have to add around 70 cents to that final final end product. And for something like that kind of product where people are already willing to pay a little bit more, that was not a barrier. And actually, in conversations with our single largest cargo client, who signed signed a letter of intent, which is a coffee roaster, we’ve worked with them to create a new business plan, and we would actually be able to exactly price match their current service.
Craig Eason
Okay, so there’s a good market entry point there, the good market incentive there.
Danielle Doggett
But at the same time, sorry, to cut ou off, at the same time, we could match their current service price, which I was, I was surprised to find that out myself. But why why should we? We are providing a premium service. And this is a premium, you know, exclusive opportunity. For this client we work really closely with we are going to do everything we can to lower the price. But why should we say it’s cheaper than to subsidize fossil fuel industry?
Craig Eason
Before I go on to talking about what your plans are for the future, there’s another question about what you’re doing there today when it came to building a traditional style of vessel like you’ve got there are three masted schooner, square rig, – when it came to building ships like that, where on earth did you find the shipwright skills to do so.
Danielle Doggett
So although we don’t, we don’t really need to look for people they come to us from around the world, we’ve had around 26 different nations participate already in the build of this vessel. And the reason they come to us is this is, unless there’s an undocumented, I can’t say properly – Pinisi – Indonesian vessels that’s not being properly documented, this will be the largest traditional wooden build currently in the world of a ship. So we attract world class timber framers and shipwrights like, like bees to honey. So that’s amazing. And it’s interesting this ship, CEIBA, is the largest ship of any kind built in the history of Costa Rica of any material, as well When she’s launched, she will be the largest emission free cargo ship in the entire world at 9 TEU, with people that are building out of wood in the jungle starting with $7,000. But to me, that’s like mind boggling. That’s how slow the competitive shipping industry is, is that we’re winning but like with a hammer and a chisel, and they’re not doing it I don’t understand. So CEIBA will be the largest in the world with 9 TEU.
Craig Eason
I guess in one way, you’ve set the bar high, but at the same time, you’ve set it quite low at the same time, haven’t you?
Danielle Doggett
should be able to beat that. Come on, guys. Take my title away. Like please. I want the shipping industry to change, you know, so CEIBA will be the largest but I hope it’s not for long. There’d better be bigger boat soon.
Craig Eason
How are you working with bringing this vessel CEIBA into the maritime industry? When you bring an ordinary ship and you’ve got to go through all the classification requirements, you’ve got all the safety requirements, the flagging, you’ve got all of those regulations that you need to abide by? How are you going through with that? How are you have you found any obstacles that you’ve had to overcome in terms of bringing a vessel like this into international trade?
Danielle Doggett
Well, we are going through that process currently. So CEIBA will be fully classed up to modern safety standards, and adhering to all those regulations, regulations. We are hoping to have the flightsafety here in Costa Rica, though that does present some challenges because there are really no precedents here, set for that. And so they also are the maritime industry here is kind of small, they don’t recognize ABS, they don’t recognize other things, so whether or not she’s actually flagged in Costa Rica is still to be determined.
One of the largest problems that I don’t think that we will really face simply because of where we’re based, but would typically be a commercial vessel built out of wood. And this is one reason that CEIBA is not and will never be built in Canada, because Transport Canada, which is the Ministry there, does not recognize wood as a viable material to make any commercial vessel out of, which is absurd, because we’ve been doing it as a human race for 1000’s of years. And this is absurd to me, you cannot, you’re not going to get an exemption. And your vessel also, you will not get one grandfathered in. But for example, the United States has a nationwide exemption to this, and which is why they have such a thriving beautiful wooden boatbuilding tradition that’s still alive.
Craig Eason
So you can’t build a commercial vessel in Canada made of wood?
Danielle Doggett
it’s not gonna happen. Some people might tell you could apply for an exemption, but I’ve been familiar with it for many years, it’s not going to happen. It’s very unfortunate. And maybe one day, when I’m older, I’ll work for Transport Canada, and I can’t wait to strike that from the, from the paperwork.
Craig Eason
Let’s talk a little bit about your future plans, because you made it clear on the website, that Sabre is a flagship, you’re not stopping at one vessel. This isn’t just a Showboat. This is a commercial enterprise. And there are commercial goals. So what are your plans? Tell me a little bit now about what you’re doing next. Because you can’t continue to build CEIBA after CEIBA where you’re building it at the moment, you’d probably run out of wood before long.
Danielle Doggett
Well, it’s funny you say that. So we, as I said earlier, are looking to expand kind of in multi directional, many different ways. And so really, we do actually, okay, it’s not announced, I didn’t say this, we’re going to announce we are building a second ship of this design. You guys didn’t hear it here, though. And that’ll be announced quite soon. And no, there’s no, no, no, you can build with wood.
We actually have an inherent tree planting program and say that is mandated to plant 12,000 trees before she hits the water, I think we’ve put around at the end of this year, it’ll be 5,000 trees in the ground. And we’ve only cut down maybe 500. So we’re putting at least 10 times more we were in 500 is pretty much the highest number that will be used for the ship, so we are planting many, many more. But here in Costa Rica, they have some of the most strict forestry laws. And it’s one of the only countries in the world where the National Forest is actually increasing in size every year. And this is something that’s very important for us to be able to verify that we are getting wood in a sustainable and regenerative manner. Actually, right now we have a nonprofit branch and they’re running their “Trees for Seas” tree planting campaign. So if you want to plant a tree, you can contribute that way.
But to answer your question, we’re also looking at building large commercial ships. We are forming some partnerships right now that are very exciting, with port authorities and industrial shipyards and naval architects, they’re really the best from around the world. And if everything falls into place, which we’re not sure if it will, there would be guaranteed cargo contracts for those vessels as well, the large commercial ones,
Craig Eason
and these larger commercial vessels, well, they all but also be looking at wood constructions, are you looking at expanding your vessel types as well?
Danielle Doggett
Yeah, these would actually be built of steel. And this is a big step for us because CEIBA is very beautiful, because she is inherently carbon negative and organic and her life cycle will be very beautiful. When that ship comes to its end of its life, which could be as long as 100 years, it’s made of wood, and it goes back to Earth. And of course, steel is a natural material from Earth, but it’s not really the same. When you look at lifecycle analysis. So I’m happy to say, you know, if we build a large steel vessel, I’d write imperfect, I paint the word imperfect, very large on the side of it, so even if the operation is carbon neutral, because we would not be using fossil fuels of any kind, the steel itself has a very heavy, heavy carbon and social footprint, which is something that we need to look into before I can really comment further. But we do intend to do feasibility studies and environmental impact studies on that. You know,
Craig Eason
I’m aware that the production of steel is particularly intensive, in terms of energy needs. I know there is there are projects, I’ve read of some research going into looking at renewable energy to provide electrification of steel production, in terms of how the the iron ore is, is melted down to produce the steel, but I believe it’s very much in its infancy. So that and that was one of the questions I had about how you would how you could justify that switch to steel, given what you were saying before?
Danielle Doggett
Yeah, well, and it’s funny, you know. Wth saiba we’re very environmentally inclined, we’re, you know, really bordering on being activists, I guess in some ways people always ask us, how can you be environmental if you’re cutting down trees? You should build out of steel, so you don’t cut down trees? And I say, Do you know the first step of making a mine? You clear cut. You clear cut, and it’s typically in Brazil that has all the world’s largest iron mines, you clear cut the Amazon and then you start so no, it’s not more sustainable than building with wood. But this is something we haven’t, we don’t have a formal answer on yet. How do we justify working with steel still, which we will be doing research on that, and having statements and having carbon offsets and talking about that. But the justification is decarbonize the maritime industry, inspire others to do more, and work towards a better future. They invented the lightbulb working by candlelight, you know, so you kind of have to work with what you have, and push that forward. And that’s what we’re doing. So again, I would paint in letters imperfect on the side of that vessel.
Craig Eason
How do you say the CEIBA and the these other vessels that you’re working on, they will also these other vessels will also be sail powered, so you’re demonstrating the use of wind power primarily. But I know in the CEIBA, you’re you’re looking at other technologies on board, you’re looking at having fuel cells and hydrogen. And another area that I found really, really quite interesting is this ability to use the propeller, when you’re under sale to Gen to basically generate electricity to then as electrolysis and then generate your own hydrogen on board. Do you see this as being something that you can demonstrate on larger vessels as well, this ability to use fuel sales and use your own hydrogen generation?
Danielle Doggett
So just a quick point, CEIBA, the actual first ship we’re building is going to be powered by to 150 kilowatt electric engines, which are supported by a very large battery bank. So those will be regenerated using the solar panels and as well, as you said, the propeller. So when the ship is actually being propelled forward using the sails, we can adjust that variable pitch propeller and just generate as much drag resistance and create electricity as we desire. We have conducted, in hope that’s the right word now, in partnership, where we have contracted a feasibility study for a CEIBA-type vessel for using green hydrogen fuel cells to power the ship and this is something we’re just beginning to explore now that’s very exciting.
CEIBA seems to, according to the study, which we’ve been reading, by Ad Astra rocket company, which is an affiliate of NASA, CEIBA seems to be the smallest vessel that hydrogen becomes feasible. And so to really scale hydrogen, you want to have larger and larger ships or at least larger and larger applications, and then that can justify a ship using that. So we’re even looking at potentially having a hydrogen, green hydrogen, production facility here at our shipyard, which would power potentially a potential CEIBA-type ship, all of the work at the shipyard, and up to a fleet of 90 open boats, fishing boats, that I referred to. So when you have larger applications, even smaller ones make sense if they can fit in as part of it.
Craig Eason
The reason I was asking that I am aware of the Energy Observer, which is sailing around the world, demonstrating solar power, wind power, and the ability to generate its own hydrogen on board for a hydrogen PEM fuel cell that it has installed. And that’s why I was interested in how you’re taking what is essentially, what I see there as a demonstration of onboard hydrogen generation and putting it into a into living commercial space here, and then even scaling it up, even further to make it even more viable.
Danielle Doggett
Yeah, absolutely. We’re very excited about moving forward with potential hydrogen in a large commercial vessel. So this is very, very early stages. But according to I got to meet an astronaut on two days ago, Dr. Franklin Chan was the founder of an Ad Astra rocket company, and he believes that it is possible and scalable and would be viable to do it on a very large scale. But basically, we’re driven by the fact that we will not use fossil fuel, so we’re not clinging to it, like every single other design out there have large commercial vessels. So you know, for example, OceanBird reduces their use by 90%, but they’re just clinging to this fossil fuel, and I don’t really know why. So as soon as you eliminate that from the equation, other things start to look more interesting.
Craig Eason
When you look at the effects of this scaling up aspect, and with the saber, you’ve got certain limits that you’ve got on the size of the vessel that when you designed it, but do you, you’re saying with these other vessels when they become larger vessels, then as you’re moving forward, you’re looking at larger vessels, and how do you see what do you put them into the same kind of trade that you’ve got planned for CEIBA,, where you’ve got long term contracts with cargo owners who really want to demonstrate that they are actually sustainable in that part of their production?
Danielle Doggett
Yes, absolutely. And we it looks like, as tese contracts come together, so I can’t say that they are secured yet, but all every single one of our larger conversations, they all want exclusivity. So they recognize the value of that, they want to have long-term exclusive contracts to really lock in the fact that they are special, they are the ones who have this, and they do not want to lose that service to to a higher paid a higher bidder. And so because there are so few ships, there’s almost no ships available right now. And we’re seeing pretty, pretty competitive conversations, actually.
Craig Eason
Who do you think that they do you think you’ll soon start to see competitors emerge?
Danielle Doggett
Yes, and no, I mean, I hope we do. And I hope we see competitors emerge. But I just don’t really see it happening. As I’ve said, this even Ocean Bird, which is a very wonderful example, I have the whole thesis study here on my bookshelf, clings to fossil fuels. So until there is a vessel that simply lets it go and they are emission free, and they’re carbon negative, or minimum operational is carbon neutral, we literally do not have any competitor because we offer different service.
Craig Eason
So what kind of influence do you think you’re having on the maritime sector?
Danielle Doggett
I’m not sure sometimes it feels a little bit removed here in their jungle shipyard in Costa Rica, and I don’t always get to get out and really see what’s going on. But just last week, actually returned from a sort of reconnaissance mission to the Bahamas to Grand Bahama and to New Providence, which is where Nassau is, and it seems like people are catching on, basically that this isn’t simply greenwashing gimmick fad, this is long term financial stability. And this is resilience. And we see this with the Ever Given. And we see this with the COVID pandemic, and we see this with the fluctuating oil prices, and because of COVID, the lack of access to oil, shipping grinding to a halt. The resilience factors is in our faces. And people literally can’t get the things they want to order on Amazon and this frustrates people. So it’s in their face. Now.
Craig Eason
You said that the this is a sort of a $4 million project, and you started off with barely, I don’t know, just a few, a few $1,000 in your back pocket almost. How have you managed to get those funds in? And what sort of business do you see this becoming? Because I see on your website, you’re still looking for funding to be a stakeholder or a shareholder in Sailcargo? That is still part of your plan? Because obviously that’s the business model. How are you managing with that process? Because at first glance, people might think, ‘Oh, I’m investing in a charity wonderful’, but you’re not,you’re a business. They’re they’re making a financial investment, effectively, aren’t they? So what would I if I invest in Sailcargo? What do I get out of it?
Danielle Doggett
So right now, our only investment opportunity is to invest directly in CEIBA, the ship, which is represented by a company called Inverssiones Maritimes Ceiba, and that’s the entity that just represent that ship, and you would own a part of that ship and the returns would come from the operation of that vessel. And you can actually email me right now, if you’d like at info at sailcargo.org.and I’ll send you a info pack on all the return on investment projections, we present a 25-year plan. But really, it’s a very long term investment as well, and so the operation of this ship should was proper maintenance be up to 100 years. And if you if you look at a container vessel that’s up there right now, the average age is 10.5 years. And so there are some really interesting details about our business plan that they really tend to convince people.
What we will be doing soon, very, very soon, is opening up to receive investment with the umbrella company called Sailcargo Inc. and that’s going to signify the shift that we’re making, from only doing smaller wooden vessels and potentially scaling up into a pretty competitive, large commercial sector. Basically, just keep your eye on us and watch for these investment opportunities, but they’re going to be popping up.
Craig Eason
That’s Danielle Doggett from Sail Cargo on the future plans for CEIBA, a CEIBA twin and her ideas on sustainable steel hulled ships in the future. And I hope to talk to Danielle again later in the year to hear how her plans have developed.
