E104 - Guillaume Le Grand from TOWT

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Oh, go for it then.

Guilherme from Tout, thank you so much for coming along on the Green Element podcast. I am so looking forward to finding out more about what it is that you do. I came across you from a friend of mine, actually, who works in media, and she emailed me and said, wow, look at what these guys are doing. You need to get them on the podcast. And we reached out and you thankfully said yes. So thank you so much for saying yes. I know that you are probably incredibly busy and in your words, disrupting the shipping industry. I can't wait to find out more.

Thank you very much, Will. You've got really good friends.

I like to think so. I like to think so. So, I mean, let's— if you could, what is it that you do? You know, in a nutshell, really.

We use the wind and try to harness it to transport large amounts of cargo in a CO2-neutral way and to promote it and value it on the end customer's market so as to make it viable on the long term and build new sailing cargo vessels. This is what we do in a nutshell. Just to develop a little more, we charter existing sailing vessels. We've done so for the past 10 years. We've moved about 1,000 tons of cargo. It can be coastal, crossing the Channel, along the European coast, or across the ocean. So we started trading goods, buying and selling goods for what they were noble enough and good enough to be transported by sail and for what they had virtually a nil carbon footprint. And then started working on behalf of third parties or cargo owners. And then we have invested the last 3 years in R&D and are about to launch the build of a 67-meter thousand-ton carrying 3-masted sailing cargo vessel with, you know, a middle-large or middle-sized company on board importing cocoa beans and coffee as well as tequila from Mexico or exporting cognac champagne as well as jams, for instance, at a different freight rate at the freight, freight that includes the fair deal for the planet and that allows the cargo owner to apply on each of the products a label called ANIMOS that actually documents and gives the end customer the information about how the crossing happened.

And I mean, this is so funny, isn't it, how we're almost going back in time. with what you're doing. And I know a friend of mine was involved in a Dutch firm that he helped design kites that were retrofitted onto boats, so therefore they could use trade winds and turn, I guess, turn off the engines and winch the kites up into the air, and therefore they would then get pulled along. by the kites. And you've almost, I guess you've gone one step further in some ways where you're actually only using sail to go across. And so if I was a coffee company, is it more cost effective to use you?

Well, you can't have both a beautiful ship, a zero carbon neutral, well, zero carbon footprint and a really nice label and something that costs less than something that already cost almost nothing because existing shipping, if you were to import 30 tons of coffee in a 40-foot container from Veracruz, Mexico, let's say, to Southampton, you probably pay £500 or dollars for the shipping, which is very little per coffee bag. That's something like 1,000th of a penny. So this is the current cost of shipping. Shipping doesn't charge you for the emission of mostly CO2, but also sulfur gases that emits into the atmosphere, especially in the international waters where it doesn't exist virtually legally. So we are trying to say, look, you are a coffee importer of a very nice origin. You want to promote your coffee from Colombia or from Mexico, and we've got the capacity to move 50 or 100, 500 tons of coffee on your behalf. Would you think that if for each voyage we can publish a film about the cooperative you work with, about the stevedoring company that loaded the cargo, and then do a portrait of each of the sailors and give your end customer the exact GPS footprint, how the winds actually pushed the the ship to the UK, and you could tell your end customer that you contributed to the savings of 500 tons of CO2, which is about 110 grams per bag. Do you think that would promote your origin and the way you source your coffee in Colombia for something that altogether costs in the 10 or 15 pence per bag? Because that's only what it ever costs. And probably some would say yes, and this is what we are doing at the moment. There's a French company called Belco, and they've booked about 3,000 tons with us from Colombia, Mexico, from Brazil, from Ethiopia. So this is something, a good deal for the planet, going beyond greenwashing, promoting your terroir, your origin. It can be here for tropical products, it can be abroad for, you know, people in the US don't always know that Champagne is also a French region, and it's good sometimes to remind it. And there's no better way to promote an origin, a soil, a way to do things, a taste, than to actually promote the way it's come to you. So we're actually trying not to be sort of environmentalists or activists, but actually to promote a positive commercial offer on the in the logistics, something that's not easy. Obviously, shipping is something massive, is something that's very opaque in general, something that is very sort of leveled down in terms of costs. And, you know, the cheaper, the better in terms of shipping. So we're trying to change that and offer something that's positive and that corresponds to what several companies need now. to be concrete and tangible about the way they can contribute into making a better world in terms of carbon emissions, but also speak to younger generations, also think of themselves in 10, 20, 30 years' time because their current shipping contracts implies that they sort of re-sign it or re-bargain it every 6 months. So we are saying, look, We are signed together for 10 years and something you don't, you know, and we're going to have a beautiful ship coming. And that's good for your image in general. And that costs much less than most of any sort of advertising campaign you might go into. And that's something that, you know, allows you to speak directly to your customer. It sort of goes without saying into the UK, because you're an island and you all have someone that was a sailor in your family somehow, but it's good to speak to, even on the continent, to anyone saying that, you know, 70% of the surface of the planet is blue. Your coffee will never grow in your garden. And we can think of a 21st century where we try to curb climate change while trying to do things in a better way, while still having a certain value over things that don't. You were saying about going back to the past. That's only partially right. Of course, it's a 6,000-year-old tradition and skill and craft and know-how that we are using, also making the most of more modern technologies. But out there on the blue ocean, the only and very abundant energy is wind and it's renewable. And it's now very— now I'm saying for the past 10 or 15 years, it's now really predictable with With new technology, you can actually route your ship where you need to without sailing into the storm or without really having no winds at all. So you can actually guarantee a service that's virtually near carbon and that's efficient. That's actually efficient. That's what we offer. 10 knots, 1,000 tons, we cross the ocean from France, say, to New York in 3 days. 13 days. So that's something that's quite comparable to what the modern services offer. And we need to actually be efficient on all levels of the value chain. And in that, we are efficient. I'd also say— Sorry, that was a long answer, wasn't it, Will?

No, no, no, no, it's brilliant. It's really, really good, really descriptive.

Sorry about my English, by the way, to all the—

Your English is fantastic. if anyone is wanting to complain, they can more than welcome to come onto the podcast and speak in French as an Englishman. So therefore, I don't think anyone can complain.

It's always about enjoying, isn't it?

I'd also say that what you have is you've put together the true cost of shipping, really. And I think that it was really interesting for you to But to hear your explanation around, say, £500 for that shipping container and it costing 0.000 pence per thing, and yours is 15 pence, I would say that 15 pence is actually the true cost, and that's what should be taken into consideration when you buy coffee. And you're also future-proofing—

If you buy coffee, you should say 14, and I'd probably say 16.

Yeah. Yeah.

No, no, obviously the cost and the price and everything. Of course, we put out a new generation ship. Maybe there's going to be other generations. What does a ton of CO2 into the atmosphere cost to us? And what does it cost to the, you know, 100 next generations after us is something that's obviously— this is the cost of all the efforts and best, you know, service we can bring. Some things that also make it realistic Sort of democratic. You can have a really nice coffee for £3, £4 coffee bag, and you don't double the price as we currently do, more or less. Because at the moment, this is on the ships that we work with, the cost is higher than that because this is the cost of what it takes to use existing traditional sailing vessels and cross the ocean with them.

Yeah, no, exactly. And I think you're future-proofing the way that we can buy and trade with each other around the world as well, because we do have to take into consideration the environmental cost. And I think people don't actually think about that. They'll look at the origin and they will look at who the company is and the way the company is. So are they a B Corp? For example, but they may not necessarily think about the whole supply chain within it. And there's a number of B Corps that are now quite large coffee companies that are B Corps or becoming B Corps in the UK. So purpose-driven coffee companies. And I would hazard a guess that they will listen and they will be watching your journey and start to think, actually, touts make sense with what they say and what they do.

And I think, well, business and consumers have proven in the past that they can contribute to changing things. Look at what the organic labels have allowed. What is the association in the UK? The Soil Association and what it sort of certifies for the products that come from abroad. You know, that's actually allowed an improvement in the way agricultural practices were performed around the world. Look at the fair trade movement that's hopefully helped realign the sort of interests of the North and the South. And it's just that there's no carbon label at the moment. You can't decipher, you can prefer a chocolate bar for what has been brought on the ship that, for instance, does slow steaming, which is reducing its speed so as to reduce its footprint. So we've been, for instance, looking at what the organic or the fair trade movements were doing. And one is agricultural, one is about sort of local economy, about the general premium that's paid to the consumer. But we realized we needed to do something entirely different. And because you are eventually the end payer for the maritime shipping, but you You don't know anything about how your t-shirt has come from China. You can't even find out, even if you were to investigate, what ship brought your coffee from Mexico, say, to the UK. So even if you wanted to do something better for the planet, you couldn't. So we say the— we don't say the conventional fossil fuel cargo ships are bad. Well, we let the others say it. We just say that what we do is— no, we don't say it. I haven't said anything, did I? We just say that what we do, with what we do, you've got a produce that thanks to which you can find the information about the crossing, and anyone understands that a 20-knot westerly prevailing wind allows you to come in a favorable manner back to Europe. And this is how we want to explain this, because this is part of our maritime identity, dignity, And we're all part of it. We all should know what happens out there on the sea for the products from overseas. So of course there is a business mind, a commercial approach in what we do. And C'est Moi, for instance, they're quite big in France. This is the first chocolate makers. They fill our hull up to 12,000 tons of cocoa beans from Abidjan, Ivory Coast to France. And these are not exactly, you know, the small guys that sort of buy 2 bags of coffee a year, which is also what we do. And we respect very much because they are our customers. But it's a company that's able to make its own decisions and not to be lured by greenwashing, as there are many initiatives that more or less greenwash the future of shipping. There's plenty liters of green paint around for all sorts of labels, industry-wide sort of initiatives that don't actually reduce anything. With a sailing ship, either you're on board and you know it's an impeccable way of transporting it, you can value it, there's no cheating about it, no sort of— or you're not on board and there's either or. And of course, there's the romantics about it because we're aware of it. You know, our sort of very sort of culture and civilization was based on sail. But we don't really put it forward because it's all sort of somehow untold. There's something that's just part of the general sort of spirits around it. It's really about the footprint, about the maritime expertise, about our sailors, and about how the wind is actually, you know, the best way to transport cargo across the ocean. Sail is only a way to harness the wind. You were mentioning, of course, the kites. Kites are— if all of the 50,000 conventional fossil fuel cargo ships had kites, obviously the sort of general the global fleet's emission would be going down by something like 10 or 15%, which would be great. But as such, a kite doesn't move a large sailing car— a large cargo ship. It sort of helps when you got the adaptable or the favorable winds, you can hoist it and then it sort of lowers your consumption and emissions. So you don't switch off the engine with the kite. You've got other ways, you've got like all sorts of wings and ideas and 3D pictures on the web. What's good with sail is that we've got centuries or more of experience. Now textile has allowed us to build larger sails, more efficient, and it's got the best Yes. With, let's say, 1 unit of energy from the wind, this is the best way, this is the best yield to transform the energy in speed for a sailing ship. You could put a windmill on board a ship and transform the energy into the propeller. You would probably multiply 0.1 by 0.1, and at the end of the day, your ship wouldn't move and would be dangerous, and you would need your engine anyway. Anyway, with sails, you take— you make the most of the wind energy to actually move your ship on long distances with big displacements. Sorry, talking about future generations, bear with me. One second, I'm right here. So wind is— sail is not just Pirates of the Caribbean, or it's not at all actually, is It is a scientifically proven way to harness the power of wind.

Yeah. And how did you get into this? Are you a sailor? Is this what you did beforehand? Are you an engineer? What's your backstory for this?

Well, I'm not a professional sailor. I was a young sailor when I was 6, 7 years old with my grandfather in southern Brittany. And we were sailing without GPS, without really knowing where we were. And that was back in the sort of late '80s, early '90s. And this is only afterwards that I realized, like, back then I sort of intuited, I sort of felt the power of wind. You know, you can't just just sheet your sail with your arms like that, even on a 5-meter boat. You need to be— this is really strong and that blows all the time and why don't we just use it? That was the sort of initial sort of seed that was planted in my brain back then. And then I actually studied far from the sea in Lyon, well, far away anyway, and sort of wrote my dissertation about Kyoto and the way maybe the cap and trade thing about putting back the price of carbon on the market might actually, you know, as if the invisible hand ever did anything sensible to the environment, but maybe it was. Remember 2005 or '06, you know, we thought that we might start stop doing silly things because Kyoto really raised a lot of hopes. You know, you really thought it was, you know, we realized, you know, Al Gore had published The Inconvenient Truth and suddenly we realized that the ice were melting and that, oh, we've got no way, not even to go back, but even to stop that. And just living makes us warm the climate. So, you know, that was a bit, and maybe Kyoto might help. Of course it didn't. And I worked for a couple of years in sort of trying to do the carbon finance thing, actually in the UK as well. And when I was in England, I went back to sail a little bit down to Brighton and sort of started to do it the English way, which is a bit sporty, a bit crossing the channel with, you know, 5 strong guys and go to Cherbourg and down 5 pints. And then, you know— No, and then sail back. And, you know, that was the weekend. And so, okay, that was interesting. And my idea really was how to try to give a meaning to sail. What do we go out sailing for? Is that for pleasure seeking? Well, okay. And that's quite, you know, sort of of selfish or not selfish, but that's, of course, that's the best way to discover the element and the tides and winds and, you know, obviously the physics around a boat. You know, there's not that many ways. The racing thing, the racing is just another way to go around in circles, just slightly faster. But obviously, they also helped, you know, new technologies to, you know, rise a bit like Formula 1. And I was thinking in 2006, '07, maybe to buy a 15-meter steel ketch with 2 friends and stop working, go to the Dominican. That was back in the times actually where in central London, all these sort of farmers market were sort of, you know, organic thing and, you know, fair trade. And we thought that we would be sort of, what is that, Spitalfields Market, that sort of place, you know, and have a locally roasted organic, low carbon, sail transported coffee. We thought that there was a case, there was something, an opportunity. to do. And then we would be sailing for 5 months and bring back 2 tons and do the event, setting up the Thames. And that would have been great. And it's just that we had no experience in the logistics, the customs. So, you know, we could be sort of done in, you know, you never have a coffee. How'd you go out there and buy coffee in the mountain? I'm just saying this because I've got it. I'm surrounded with bags of organic Colombian coffee right now because this is actually what we did. And I realized that we would do it Well, and my friends thought that was just some sort of funny idea, you know, and that was my fixed idea. And then I met with Diana, who's currently my associate in everything, really. And she was really a bit of a serial entrepreneur. She had a business sort of thinking and said, you know, we should do a company. Because you could do an NGO, you could do a political party, you could do some sort of, you could do a circus. There's plenty of ways to do sail cargo or a PR company, but we thought that that was going to be a company. Even though we knew that that was going to be hard and that obviously there's no money, but if you don't prove anything in terms of your ability to make a living out of it, then there's no point. The big cargo, fossil fuel ships will have prevailed. So we knew that was going to be hard, that we were nothing. We weren't even a drop in the ocean and that the ocean was really big. And then for a couple of years, I came back to France and started working. Well, that's a long story. Anyway, I developed, I spent most of my time developing what that was going to become. And then I met— well, that was identifying all the largest sailing ships. We sort of made the decision that we would be chartering existing sailing vessels, not start by saying that we would build a ship of the future and then tweeting and retweeting it and then waiting for, you know, we thought, no, okay, let's do it. Let's charter, let's work with existing vessels. ships, you know, there are really big sailing ships out there. There must be some that, you know, might carry these 2 tons or maybe 20 tons of coffee. And we met with one called Tres Sombras, one of the pioneers of the fleet, who was in 2010 crossing the ocean for the first time, and they're going to do it for the 10th time, bringing back rum and cocoa beans and coffee. So we started selling it and distributing it, chartering the ship from Devon to Brittany and distribute organic relay from England into the Breton organic markets. And then from there, we developed a small sort of trade business, not for the sake of trade, but because we wanted to promote sail cargo labels and to pay the boats for a new activity and diversify what they could be doing, but also to know the products better. And I realize that now speaking to Semua, for instance, I know what a Criollo, a Forastero are, or what a cadmium rate means into cocoa bean, or how you roast your cocoa beans. And all that experience was gained over the years, or how you keep the duty suspended over the alcohol that you transport, for instance, what sort of documents you need customs-wise. So we were really gaining in experience of the cargoes, of the sort of logistical expertise you need to have around this, but also my sort of sailing thing was coming back and needed to study how the winds were blowing over the year on the Atlantic because obviously there are seasons, the trade winds that you were bringing up have their own seasons, and can they actually work with the coffee harvest season? Actually, they do very naturally. And also the contracts, you know, how do you How do you charter a vessel? Where is the money? How do you, you know, how do you get on with the sailors? How do you, you know, value everybody? And you don't. And so we charted several French ships as well. New larger ships turned up. We can quote the Greyhound, we can quote the Aventure, and the Gallant, for instance. And all these like coming back from the past, it's sort of floating anachronisms, but they're here and they carry altogether hundreds of tons of cargo and they do it right now with hundreds of sailors around them, ship owners. We are part of that sail cargo movement, say, and promote leverage with our label, the fact that these products have been brought by sail. It does exist. exists, believe it or not, and it has a— it's not that expensive. And as of 2015, we really started sort of thinking, investing, doing, you know, looking for grants for the R&D in the field of the newer ships. So then there were designs out there of really large sailing vessels over 100 meters, such as the Eco Liner or the B9 ship from England. And the decision was, well, the thinking, you have to have a strategy at some point. When you're David and then you need to fight Goliath, you know, when you're really, you know, the Palestinian and there's the Israeli tank, you need to have a strategy. You don't just go out, you know. Are we going to sort of build Are the first new sailing cargo ships, are they going to be trying to be as cheap as the, you know, 400-meter container carriers? Do you want to compete with the 500-quid container for crossing from Mexico? Well, if we do that anyway, you know, this is okay. We wouldn't probably need to wait for the oil price to raise, or we wouldn't need for new sort of more demanding environmental regulation on the IMO, the International Maritime Organization. And then that's another head of a sort of, you know, let's not do that. Let's value what we do for something that costs a few pence, a chocolate bar, coffee bag, or bottle of rum, and something that makes it sort of happen and break the ceiling of the sort of larger market and not go for 130-something like 5-masted sailing vessel because it's very risky, very risky financially. You would sort of be reaching out to markets where you are so big anyway that most of those sort of freight forwarders or the cargo owners, you know, they're used to have anything, you know, if not cheaper, not at all. You know, they say the cheaper, the better. Why would they pay anything more than what they already pay? They've got no incentives for it. So we thought that given the current technologies, what we could do given the sort of freight rates, being able to charge something like 50 pence, 40 pence per kilo to cross the ocean is something that we think is, you know, we can work on this for going for thousands of tons. And that would, with that, we would need to carry 1,000 tons 8 times a year going around the ocean and steel hull, steel masts, mechanized largely with 7 sailors. You can have passengers and then you can start— and you don't do iron ore, of course, and we don't move around, I don't know, tractors or things like that. Of course, this is the traditional routes of importing, again, cocoa beans, coffee, but— agave syrup, is that how you say it? You know, that thing from Mexico.

Oh yeah.

Or maple syrup, sugars, spices, and exporting to the Caribbean products that they need from here. Export to New York, use the most, make the most of our being French and export the best champagnes and cognacs and wines to Northern America and to Canada, coming back from there from wood, actually wood for barrel makers in France, exporting jams, the famous, I can't quote it, jam from France that's very posh and so French and chic in the US, and importing cocoa beans from Ivory Coast, but also exporting their champagne because they're very keen on champagne. So these are all the markets that produce use can be shipped for 50 cents a kilo with a nice label, with a nice identity, giving hope to brands that sometimes need to rejuvenate, to be younger, is that, you know, to dress to younger clients. And none of them are, you know, the sort of publicly traded where you need, you know, 50 people to agree and sit in the same room and no one ever sits in the same room anyway. And they sort of keep cursing at each other. And you never really get to the bottom, and no one ever decides, because they're too big anyway. But if you go to family business, family businesses can be big, but you can tell them that sale cargo is not about logistics only. It's not about only your supply chain. You're going to have to change your supply chain. You're going to have to change the way you store your things, the way you understand your own just-in-time thing. And, you know, thinking financially of your different fluxes, but you can also gain in terms of general image, PR, but also label can actually change the way you actually commercialize, the way you sell your products. And we've got even other points to put forward. The quality inside our hulls is sometimes better, well, it's always better than in containers. better, for instance. So, when you load cocoa beans, which is fatty and sort of capture all smells, you are really happy that you can vent your holds and that you can make sure it doesn't stink because that's what actually happens. You lower quality of the cocoa bean coming in. We can age spirits, and this is a non-negligible part of our income. We actually age wine and spirits. spirits because the hulls and the temperature variation, you know, we got contracts for aging wine and cognacs and rums. So these are all the— we got passengers possibly, and these all make it viable to build the first ships. So this is what we're doing.

Brilliant.

Brilliant.

I mean, it sounds absolutely fantastic what you guys are doing.

And then you go see the bankers. Sorry, I'm just going to the next thing because the bankers He just looks at you like, whoa, this guy is such a lunatic. And he said, I'm the head of shipping in the biggest bank of the world. Well, not maybe, but let's say the biggest French bank. And we know what it's like, shipping, and we don't work for less than €500 million. Okay, okay, sorry, I don't need that much, but I would just need— and I started, but they're clever people, you can talk to. And after an hour, they are like shipping finance. Obviously, shipping created finance almost, and finance created shipping somehow. They're intertwined. And actually, it's quite simple. You've got 6 categories of ships and there's a purchase price, there's a price, there's a second market rate, and then a sort of ocean in which the ship is going to sail more or less, or there's a job it's going to do. And that's 3 figures. And if the lights is green, then you got 500 million, you know, and build your ships and do your thing, you know. But how much is worth your ship in the second market? How much is la la la? Oh, that's very risky. So come on, you know, this is very small ship. It only costs, you know, 10 million. And sorry, I can't help you. So this is, you even need to be innovating in terms of finance. So we are actually trying to go to fundraising and go to the renewable energy funds. We've got really good news at the moment, so we're really happy with it, and people understand the tangible— well, the reality behind it. But it's just that you need to change a bit things even in the money behind it, etc.

It sounds like you've got an awful lot going on. And I want to thank you for being on this podcast.

Sorry, I've been a bit long, Will, haven't I? No, it's been brilliant.

It's been a really easy podcast, actually, because all I've done is listen. I feel like I've been a listener. And sometimes that's actually really nice because that's what we are here for. We're not listening to me. We're listening to the person that we're talking to and we're learning from them. And it's just fascinating what you have gone through and the fact that you are learning all this from scratch.

Absolutely.

And the fact that you are working in a very old shipping industry and it'll be interesting to see what goes on for the future because we know that shipping has to We are already starting to see elements of that, be it through electric shipping. So therefore you are a part of that journey and you will probably be pushing people into more of a change as well. And so thank you for being that catalyst and thank you for being on the show.

Yeah, no worries at all. Thank you, Will, for having me and thank you all to have the patience Patience to listen to me if you reach that, to that point.

I'm sure they will.