The main aim of the sulfur cap, is to reduce the release of sulfur oxides, thereby minimizing the harmful effects of global shipping on health and the environment. In East Asian coastal areas, for example, this limit was already established in 2015. And we know that an increase in freight rates for raw materials such as iron ore and coal will likely translate to higher costs for the steel sector. The IMO 2020 regulation was expected to cause considerable disruption in bunker fuel availability and cause oil prices to rise. IMO 2020 – How Regulations will impact the Shipping Industry. These sulfur elements make up around 3.5% of its weight. IMO 2020 is about to get real. That’s a whole other level. In addition, the low availability means it’s unlikely that many vessels will be equipped with new mixtures of low sulfur fuel during the initial period. This formula is checked monthly and adjusted to the crude oil price. Use that to your advantage. What impact does this have on the industry? Delay fees and GRIs have the potential to greatly affect your overall shipping costs. Such systems work by cleaning emissions prior to its release into the atmosphere. In this article, we’ll dive into what the IMO 2020 is and its background, understand compliance methods, and how of all this affects you as a shipper. The IMO 2020 is a regulation set by the International Maritime Organization that states that as of January 1, 2020, the sulfur emissions of all maritime vessels must be limited to 0.5% m/m (mass by mass), down from the current 3.5% m/m. In addition, we increase the efficiency of rail transports through additional services such as customs clearance (also in transit countries), cross docking, LCL shipments, HUB and warehouse solutions as well as fiscal representations. The sulfur limit for ships in ECAs stands at 0.1% m/m. Against this background, we consider the new bunker surcharges to be fundamentally right, because as an industry we have to live up to our responsibility," he said. Shipping companies have three options for keeping their combustion-engine ships operational in 2020: Retrofitting to LNG, as well as the installation of the cleaning systems, will lead to the need to remove ships from the timetable, at least in the short term. Here are snippets of IMO’s own explanation of the regulation broken down and explained. As of today, over 155 countries have ratified the convention. There was an internal error while serving your request. Opinion. And with IMO 2020, this is expected to increase exponentially.”, - Aliona Yurlova, International Business Development expert at iContainers. That being said, one must consider the possibility that future environmental regulations may invalidate the use of scrubbers. Vessel operators have the following choices to comply with the new IMO 2020 sulphur limits: 1. Reduce the occurrence of lighting storms along popular trade routes. The CEO also has a clear opinion on the consequences of the regulation: "There is no doubt that the shipping companies will pass on the additional costs caused by the new regulations to the shippers. by Guest. IMO 2020 Regulation The International Maritime Organisation (IMO) rules on sulphur in fuel oil for shipping and the effect on Africa On 1 January 2020, a new global cap by the IMO on sulphur content in marine fuels will come into effect. The International Maritime Organization (IMO) – the UN agency responsible for ensuring a clean, safe, and efficient global shipping industry – will be implementing new regulations that will have a massive impact on maritime shipping. How IMO … Opinion. The current sulfur limit of 3.5% m/m will be reduced to 0.5% starting 2020. The IMO 2020 is a regulation set by the International Maritime Organization that states that as of January 1, 2020, the sulfur emissions of all maritime vessels must be limited to 0.5% m/m (mass by mass), down from the current … From 1 January 2020, the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.50% m/m (mass by mass). A likely reason for the scrubber-sceptic mindset may be due to the high costs of installation acting as a deterrence to shipowners. New regulations are certain to influence freight rates ─ the fees charged for delivering cargo from place to place. The overall objective is to reduce the negative impact of shipping on human health by decreasing air pollution from sulphur emissions by 68% globally and in particular in the coastal areas of Asia-Pacific, Africa and Latin America. Vessels must use marine fuels with a maximum sulphur content of 0.5% compared to the current limit of 3.5%. However, the world's largest container shipping company is expecting decades before the entire fleet is replaced by LNG ships. Even though shipowners and liners are the ones having to comply with the new regulation, its effect is expected to be felt by shippers worldwide. This is done by introducing alkaline water into the exhaust, which reduces 98% of sulfur oxide elements. In terms of its floating storage in the region, Monajsa says that on December 16, 2020 the 119,456 dwt SKS Dokka replaced its sister vessel, SKS Darent.. However, not all shipping companies have yet published their calculation bases. That said, there are ways that you, as a shipper, can better manage your shipments to avoid too much disruption to your supply chain.”. Reducing SOx also reduces particulate matter, tiny harmful particles which form when fuel is burnt. According to industry estimates, more than 90% of the global vessel fleet will be relying on compliant fuels when the sulphur rules step into force on 1 January 2020 and lines will need to invest in different technologies and operational investments such as scrubbers etc.. To date, the sulfur limit of 3.5 percent sulfur in fuel has applied worldwide. Lower sulfur emissions will improve air quality in port cities as well as lessen ocean acidification. As shipping vessels burn and consume bunker oil, they emit sulfur into the atmosphere as a harmful byproduct. Some resources are not available on server temporarily. Pacific vs Atlantic). It’s important to understand the bunker surcharges being implemented by carriers, especially those who provide services for your desired shipment route. In order to compensate for these additional costs (MSC expects 2 billion US dollars), the shipping companies have already announced surcharges: BAF - Bunker Adjustment Factor (Maersk Line), BRC - Bunker Recovery Charge (MSC), MFR- Marine Fuel Recovery (Hapag-Lloyd) or OBS - One Bunker Surcharge (ONE). Opinion. It has a significantly lower sulfur concentration (of approximately 0.1%) but is also significantly more expensive than scrubbers. ... Generally, most analysts project that 70% to 80% of the world’s vessels will comply with the IMO 2020 regulation by using 0.5% or lower sulfur marine fuel. However, not all shipping vessels are equipped to carry LNG and the current infrastructure supporting the use of LNG remains limited in scope and availability. Sebastian KrÃ¼gerBusiness Development EuropaRail Solutions InternationalTel. And a term you’ve seen floating around for years. The threat to the trucking industry from the IMO 2020 regulation has always been whether the new rule affecting marine fuels is going to pull so much product from the distillate/diesel supply chain that the pain at the pump affects both trucking capacity and the bottom line for carriers big and small. Current ECAs include the Baltic Sea, North Sea, several areas off the coasts of the US and Canada, and the US Caribbean Sea. These rates can fluctuate depending on: Time and distance between ports The total cost of compliance is expected to cost the shipping industry up to $15 billion annually, a part of which shipping carriers including CMA-CGM, ONE, OOCL, and APL have all said will be passed onto customers. The IMO 2020 regulation applies to all ships on international and domestic voyages. Shipping large volumes grant will greater bargaining power for NAC or spot rates. 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