lng gas

Carriers turning to scrubbers to comply with IMO 2020

Around 16% of the ocean carrier global fleet – equating to 36% in terms of teu capacity – will be equipped with exhaust gas cleaning scrubber systems to comply with the IMO 2020 0.5% sulphur cap.

Ships with approved scrubber systems installed will be allowed to continue to burn heavy fuel oil (HFO) after 1 January next year, but other vessels will need to bunker with low-sulphur fuel oil (LSFO), which is expected to carry a premium of around $200 per tonne.

And with ultra-large container vessels (ULCVs) consuming upwards of 100 tonnes a day at sea, the cost savings for a voyage with scrubber-fitted ship are likely to be substantial.

The consultant estimates that, according to a survey, more than 840 containerships are set to be equipped with scrubbers, for a total capacity of 8.09m teu, which includes 590 planned retrofits.

It said: “With the cost of scrubbers falling rapidly, to just $3-$5m a unit compared with $5-$8m a year ago, the scrubber option has become more attractive for owners.”

It noted that several carriers, including Maersk Line and Hapag-Lloyd, which had initially expressed doubts over the use of scrubbers, had “changed their minds”.

However, carriers that expressed scepticism or simply sat on the fence seem to have lost the cost-saving initiative to rivals that were in the scrubber camp from the moment the IMO approved the low-sulphur regulations in late 2016.

Famously, MSC’s chief executive called its strategy to install scrubbers on many of the ships in its fleet as a “no brainer”, whereas Maersk and Hapag-Lloyd’s executives argued that the use of exhaust gas cleaning systems was “not the long-term answer”.

Of the 12 top-ranked carriers, Alphaliner said, MSC had the “most extensive scrubber programme”, with more than 200 ships expected to have systems installed. Second is Taiwanese carrier Evergreen, with a retrofit and newbuild scrubber programme for around 140 vessels.

CMA CGM has “already committed” to 80 scrubber units, said the consultant, a number that is expected to climb to over 100 units by 2021.

Elsewhere, ambitious South Korean carrier HMM plans to have over half of its fleet of more than 50 ships equipped with scrubbers, and has made its strategy for IMO 2020 compliance a key part of its planned recovery from heavy loss-making.

Meanwhile, Maersk has said that it would install scrubbers on around 10% of its ships, and has allocated $263m for its owned fleet. It will supplement this with an unspecified number of chartered vessels fitted with scrubbers.

Carriers will need to begin bunkering ships not fitted with scrubber systems with LSFO in the final quarter of the year, in order to be compliant with the new IMO regulations.

Source: Alphaliner / The Loadstar

global

IMO talks work towards climate goals

Tightened energy efficiency targets and a commitment to further discuss proposed speed reduction rules were the key outcomes of the International Martime Organisation’s (IMO) latest round of talks, held in London last week.

But environmental campaigners were quick to argue the results showed a “total lack of ambition” on the part of the shipping industry, which currently emits three per cent of global CO2 emissions but risks seeing its share expand to 10 per cent by 2050 unless efforts to decarbonise accelerate.

With some members and leading shipping operators calling for bolder climate policies and others continuing to push back against proposals that they fear would impose new costs on their national shipping industries, the IMO agreed to tighten energy efficiency targets for new vessels across seven ship types.

The accelerated targets for containers, general cargo ships, hybrid diesel-electric cruise ships, and LPG and LNG carriers cover about 30 per cent of ships and about 40 per cent of CO2 emitted from ships subject to energy efficiency regulations.

The measures could reduce CO2 emissions by 750 million tonnes of CO2 cumulatively from 2022 to 2050, equivalent to about two per cent of all emissions from the industry over that time period, according to an analysis by the International Council on Clean Transportation.

The IMO also committed to considering additional requirements for new ships after 2025 and looking at new efficiency requirements for in-use vehicles at the next meeting, fueling hopes standards could be strengthened as investment in cleaner shipping technologies steps up.

“IMO’s move shows that further efficiency improvements are still possible for fossil fueled ships,” said Bryan Comer, senior researcher in the ICCT’s marine program. “Future standards should promote new technologies like wind assist and eventually zero emission fuels like hydrogen and electricity.”

However, a decision on whether to implement speed reduction targets was kicked down the road, and will now be taken up at the IMO’s next GHG working group in November. The deferral of any decision on speed limits came despite a joint letter signed by over 100 shipping CEOS ahead of the MEPC74 talks calling for global speed limits at sea, which is widely seen as the most effective short-term measure for curbing the industry’s emissions.

“We’ve seen over 100 individual shipping companies united with NGOs in calling for speed reduction, overruling the policy stance of the industry associations,” said Faig Abbasov, shipping policy manager at Transport and the Environment. “The shipping industry associations no longer represent the best interests of shipping companies.”

Countries who blocked further action reportedly included Saudi Arabia, the US, Brazil, and Cook Islands, with opposition to the speed reduction proposals also understood to have come from Chile and Peru.

The outcome from the meeting should provide a boost to investment in fuel efficiency measures across the sector, but it will also provide further ammunition for those shipping operators and environmental campaigners who accuse the international body of failing to deliver sufficiently ambitious climate policies.

Aviation and shipping are the only two industries to operate outside the framework of national climate action plans established by the Paris Agreement, with the IMO and its sister body the International  Civil Aviation Organisation (ICAO) instead tasked with delivering new policies to curb emissions from the carbon intensive sectors.

But while the ICAO has come forward with detailed plans for an international carbon offsetting scheme, albeit one that has continued to face criticism from green groups, IMO has made much slower progress in delivering new policy proposals.

In April 2018, the IMO responded to post Paris Agreement calls for it to deliver a new strategy by announcing targets to reduce the industry’s greenhouse gas emissions by at least 50 per cent by 2050 compared to 2008 levels. As a mid-term goal, it pledged to reduce the carbon intensity of the sector by at least 40 per cent by 2030. In order to achieve these targets, it promised to produce a detailed plan for emissions reduction by 2023 as well as immediate measures to achieve greenhouse gas reductions before this.

Without extensive action to tackle emissions, the shipping industry – which was exempted from the Paris Agreement – could see them grow 250 per cent by 2050 as trade increases, according to a 2014 study by the IMO.

A 2018 report from the OECD warned that failure to act would leave the sector emitting the equivalent of well over 200 coal power stations by 2035. The think tank called for more research into zero carbon technologies, greater transparency on carbon footprints within the industry, a carbon price for global shipping, and other mechanisms to incentivise efficiency such as ports differentiating fees based on environmental criteria.

Also last week, environmental campaigners demanded a moratorium on the shipping industry’s use of Exhaust Gas Cleaning Systems (EGCS), known as scrubber technology.

EGCS were seen as a possible route to ensure compliance with IMO rules which will enforce the use of bunker fuels with a sulphur content of 0.5 per cent from 2020, down from the existing limit of 3.5 per cent. But concerns over their efficacy have been thrown into sharp relief by their role in an ongoing case against cruise operator Carnival Corporation, in which multiple EGCS failures contributed to significant air and water pollution violations.

With the clock ticking, international pressure is intensifying on the IMO to take meaningful steps towards meeting its own emission reduction targets. Focus will now move on to the organisation’s next session in November with hopes growing that recent calls for bolder action are finally taken on board.

Source: Businessgreen.com

future of shipping

Maritime black carbon emissions must decrease

The Clean Arctic Alliance has issued a call for international shipping operators and national governments to cut maritime black carbon emissions.

Black carbon particles are predominantly produced by ships burning heavy fuel oil; when black carbon is released by vessels operating in the Arctic region, the particles reduce the reflectivity of ice and snow – the resulting heat absorption accelerates the rate of warming across the Arctic. Black carbon emissions represent both the second largest contributor to global warming and a significant health hazard to humans. The Clean Arctic Alliance, a collective of non-profit bodies advocating an end to the use of heavy fuel oil (HFO), is calling on International Maritime Organisation (IMO) member states to agree on measures to ensure the reduction of maritime black carbon emissions at this year’s meeting of the Marine Environmental Protection Committee, which begins today.

Sian Prior, Lead Advisor to the Clean Arctic Alliance, said. “By cutting ship-sourced emissions of black carbon, IMO member states could take a quick and effective path to countering the current climate crisis; and minimise further impacts on the Arctic. We’re calling on IMO member states to champion a move away from using heavy fuel oils – shipping’s number one source of black carbon – in Arctic waters. With cleaner shipping fuels already available and innovation and ambition driving the global shipping industry towards lower emissions, IMO member states must move rapidly towards zero emission solutions.

“All eight Arctic countries made a commitment to demonstrate leadership on black carbon in 2015 – and it now seems that all except Canada are backing a move away from heavy fuel oil in the Arctic. As recent comments from Russia’s President Putin and Finland’s President Niinistö demonstrate, the political will for a HFO Free Arctic exists – now it is the time for IMO member states to turn this will into action, by moving urgently to reduce black carbon emissions and by backing the ban on the use and carriage of HFO in the Arctic, currently under development.”

Source: Governmenteuropa.eu

air pollution

Vessel emissions won’t be cut by sailing slower

Policy director of the UK Chamber of Shipping Anna Ziou has slammed French proposals to impose speed limits as a way to cut shipping emissions.

She claims it would give a “false impression” of the industry taking action. 

Ms Ziou’s objection follows an outcry from container lines following the French IMO delegation’s proposals becoming public last month. 

“To achieve a 50% cut in emissions, the shipping industry needs continued investment in green technologies that will allow ships to conduct their business through a range of low-carbon fuels, such as battery power, hydrogen fuel cells or even wind power,” said Ms Ziou. 

“Shipowners have already limited speeds considerably in the past decade and while these proposals are well-intentioned, slow-steaming as a low-carbon [plan] is just not good enough. 

“It will give a false impression that the industry is taking action, when in reality it will deliver no meaningful reduction in emissions, and the scale of ambition required for the industry to meet the 50% target should not be underestimated.” 

Ms Ziou noted that if selected, the plan could penalise companies developing and installing low-carbon technologies and could discourage “meaningful” attempts at cutting emissions. 

At best, she claimed, speed limits would delay any form of transition to low-carbon fuels and in so doing would store up greater costs for the industry. 

She added: “Speed reduction could result in supply chains using alternative modes of transport, such as road haulage, which would increase overall emissions. 

“In addition, ships may call at certain ports that are tidally constrained where a delay of just one hour could result in a knock-on delay of 12 hours to the vessel as it awaits the next tide, unnecessarily creating further emissions during the additional waiting time.” 

Despite the objections, it seems there is mounting support for the introduction of speed limits after chief executives from more than 100 shipping companies described climate change as “possibly the greatest challenge of our time” in a recent open letter to IMO member states. 

Source: The Loadstar

low tariffs after brexit

HMRC outlines phased approach for Entry Summary Declarations

The government has announced plans to phase in for EU imports the pre-arrival forms known as Entry Summary Declarations, if the UK leaves the EU without a deal.

Officials on Monday held a series of meetings with organisations who represent the haulage industry and handle a significant portion of the UK’s cross border trade, to confirm that from 29 March, the status quo will be temporarily maintained as they will not need to submit Entry Summary Declarations on imports for a period of six months.

Currently Entry Summary Declarations are not required when importing goods from the EU. They will continue to apply for trade from the rest of the world.

The measure is designed to give business more time to prepare for changes to EU-UK trade arrangements in the event that the UK leaves without a deal. This builds on the plans that Transitional Simplified Procedures (TSP) can be used for at least 15 months for customs declarations.

Financial Secretary to the Treasury Mel Stride MP said:

We’ve listened to businesses and are responding to their concerns.

We have been adamant that in the event of no deal, trade must continue at our borders, and we will continue to make our borders secure.

Maintaining continuity with the current system for the first six months and phasing Entry Summary Declarations in will ensure we deliver on that promise.

The new rules only apply to goods coming from the EU, and will maintain the status quo for carriers. Importers will still be required to submit import declarations for customs purposes – which are not the same as Entry Summary Declarations. HMRC announced ways of making these import declarations easier, through Transitional Simplified Procedures on 4 February 2019.

After the six-month transitional period, carriers will be legally responsible for ensuring Entry Summary Declarations are submitted pre-arrival to HMRC at the time specified by mode of transport.

The measure will not change the UK’s commitment to ensuring our borders remain secure in the event of a no deal and Border Force will continue to carry out intelligence-led checks. A Readiness Task Force in preparation for EU Exit is being recruited and Border Force is on track to increase staff headcount by 900 at the end of March 2019.

The UK’s approach to dangerous goods coming into the UK is not affected.

Pauline Bastidon, FTA’s Head of Global & European Policy, said:

“Today’s HMRC announcement on the temporary waiver of security and safety declarations for post-Brexit logistics movements is a great response to FTA’s campaigning over the past two years, and a positive step towards minimising disruptions on trade between the UK and EU and integrated supply chains after Brexit. However, it is imperative that the UK government maintains pressure on the EU to ensure that a similar waiver is adopted by the EU. To ensure that Britain can keep trading efficiently, it is vital that the European Commission and UK agree a longer term, more sustainable arrangement to remain in the same security zone, which would make safety and security declarations for UK-EU trade irrelevant.  Above all, it is vital that the UK’s supply chain remains as frictionless as possible – British business needs to be confident that goods and materials will continue to transit the nation’s borders as swiftly and efficiently as possible.

Sources: www.gov.uk / fta.co.uk

maersk

Sea Machines gains financial support to develop autonomous containerships

The prospect of unmanned container vessels serving global container supply chains has taken another step forward.

Sea Machines Robotics, a US developer of autonomous vessels, announced it had raised $10m from venture capital funds.

The investors were led by Accomplice VC and Eniac Ventures, but also include Toyota AI Ventures, TechNexus Venture Collaborative, NextGen VP, Geekdom Fund, Launch Capital and LDV Capital, and brings Sea Machines’ external funding up to $12.5m.

Boston-headquartered Sea Machines, which in April signed up Maersk Line to pilot its “perception and situational awareness technology aboard one of the company’s new-build Winter Palace ice-class containerships”, said it would use the new funds to grow its R&D and engineering teams as well as expand its sales efforts globally.

“We are creating the technology that propels the future of the marine industries and this investment enables us to double down on our commitment to building advanced command and control products that make the industry more capable, productive and profitable,” said Michael Gordon Johnson, founder and chief executive.

Jim Adler, founding managing director of Toyota AI Ventures, added: “We believe autonomous mobility can help improve people’s lives and create new capabilities – whether on land, in the air or at sea.

“Sea Machines’ autonomous technology and advanced perception systems can reduce costs, improve efficiency and enhance safety in the multi-billion dollar commercial shipping industry. This marks our first investment in the maritime industry, and we’re excited to embark on this journey.”

Vic Singh, founding general partner at Eniac Ventures, added: “The level of traction Sea Machines has from the global maritime industry is a tell-tale sign that the industry is the next frontier for autonomy.”

And Michael Rodey, senior manager at AP Møller-Maersk, said: “I think this investment sends a strong signal on the types of technologies that will come to define the maritime industry in the future.”

Source: The Loadstar

milan Maersk

The future of box shipping: less vessel cascading and fewer liner alliances?

Vessel cascading has been an ever-present feature of container shipping since liner executives first understood the benefits of economies of scale and began the box ship capacity arms race.

But over the next few years, there are likely to be only a few arenas where it will take place, according to Drewry Maritime Advisors’ director of ports, Neil Davidson.

Mr Davidson also suggested that, with an outstanding orderbook of some 130 vessels of over 10,000 teu still to be delivered, the main areas that cascading could take place would be the North American Pacific coast.

There the maximum vessel size is expected to grow from 14,500 teu to 18,000 teu, and the west Mediterranean, where it is forecast to grow from 14,000-16,000 teu to the 18,000-22,000 teu range.

Other trades where smaller vessels continue to be deployed – for example, the Australian trades this year saw its first 8,600 teu vessel call – would continue to be constrained by port dimensions, he said.

However, he suggested that the most recent increases in vessel size – the largest ships growing from the 18,000 teu Maersk Triple-E, to the 23,5000 teu vessels currently under construction – could well be the last box ship size increases for a considerable period.

“Our analysis is based on the orderbook, and although there are some units of 23,500 teu under construction, in terms of length and beam, they are not dimensionally larger.

“In fact, the impact of ULCVs on the wider supply chain suggests that the maximum vessel size may have be to large,” he added.

He was referring the widespread belief that one of the causes of the recurrent port congestion over the past few years has been the introduction of ULCVs and the sheer number of containers they can unload in a single call. This has put huge pressure on hinterland supply chains.

Mr Davidson added: “There are also clear commercial reasons for not going bigger – service frequency has had to be reduced to fill those ships, and there has been an impact on market share, and carriers have needed to enter into alliances to maintain market share and fill those ships.” And he believes this this could have a deep impact on how shipping alliances are formed in the future.

“In the long-term, the most interesting thing is that, if we have reached the ceiling of maximum vessel size, and if container volumes in the market continue to grow, operators that currently need alliance partners to help fill their vessels may well find themselves able to fill them on their own and we may begin to see the break-up of alliances,” he said.

Source: The Loadstar

christmas

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Demand will see a massive increase at this time of year and we can help make sure that stress levels are kept to a minimum!

maersk

MSC, CMA CGM Present Plans for Fuel Surcharges

Following the footsteps of Maersk Line, the Swiss and French container shipping giants MSC and CMA CGM have unveiled their intention to introduce a new fuel adjustment surcharge ahead of the 2020 sulphur cap.

Mediterranean Shipping Company plans to introduce a new Global Fuel Surcharge as of January 1, 2019. The company expects its operating costs to increase significantly in preparation for the 2020 low-sulphur fuel regime.

MSC said that the cost of the various changes to the fleet and its fuel supply is in excess of USD 2 billion per year, the same as with Maersk Line.

“The new MSC Global Fuel Surcharge will replace existing bunker surcharge mechanisms and will reflect a combination of fuel prices at bunkering ports around the world and specific line costs such as transit times, fuel efficiency and other trade-related factors.”

Separately, CMA CGM informed that it decided to favor the use of 0.5% fuel oil for its fleet, and to invest significantly by using LNG to power some of its future container ships, and by ordering several scrubbers for its ships.

The company said that all these measures represent a major additional cost estimated, based on current conditions, at an average of 160 USD / TEU. The additional cost will be taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis, CMA CGM explained.

“The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry. In line with its commitments, the group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges,” Mathieu Friedberg, Senior Vice President Commercial Agencies Network, said.

The new International Maritime Organization (IMO) Low Sulphur Regulation will be effective from 1 January 2020 and will require all shipping companies to reduce their sulphur emissions by 85%.

Sulphur content in the fuel used for international shipping will have to be limited globally to 0.5%, compared with the current standard of 3.5%, in order to minimize the emissions.

However, Shippers have joined forwarders in condemning Maersk’s plan, pointing out that as the charge is per box, those shipping west with higher charges will end up paying for more collectively than they need to, to compensate for empties returning east. As  a result, the most profitable routes will enjoy higher-than-average surcharges.

In addition, Maersk is introducing the scheme a year before the higher fuel prices come in.

“Asking customers to contribute to new environmental costs is to be expected, but this charge lacks transparency; no data is available to let customers work out how the charge has been calculated,” said James Hookham, secretary general  of the Global Shippers’ Forum.

“Given historical experiences with surcharges, shippers are naturally suspicious over something shipping lines say is ‘fair, transparent and clear’.

“GSF will be taking this piece of financial engineering apart piece by piece, as we suspect this has more to do with rate restoration than environmental conservation.”

He added that Maersk could have chosen to fit scrubbers on all its ships, triggering a one-off expense, as some of its rivals are doing.

“For shippers, this is a better option than paying sulphur surcharges indefinitely.”

But he added that the unilateral manner in which Maersk introduced the change had also upset its customers.

“What also disappoints shippers is the lack of negotiation about the timing and the structure of the charge. It would have been better if Maersk had discussed its plans with individual customers in the course of confidential contract reviews, rather than just publishing something that wouldn’t be out of place in the puzzles section of your daily newspaper.

“We suspect that other shipping lines will be tempted to follow suit, but it would surely be of concern to competition authorities around the world if the same formula were to be used by other shipping lines, especially in the same Alliance.

“GSF would encourage Maersk to consult with customers and reconsider the strategy. These new charges may be all about low-sulphur fuel, but they still stink to us!”

Last week forwarders also revealed their anger over the “very major increases”.

“Rises of this magnitude are unjustified, and could be construed as blatant profiteering by shipping lines determined to exploit the situation,” said BIFA director general Robert Keen.

Source: The Loadstar / World Maritime News

port of felixstowe

Felixstowe productivity improving after implementation of new operating system

The Port of Felixstowe has stated that vessel and rail loading performance remain below target but no new issues have emerged as it works on resolving slow loading and delays caused by problems with its terminal operating system (TOS).

Issues first surfaced last month when the port introduced the TOS but it confirmed in the week beginning Monday 2 July that overall quayside volume was 66,000 teus and productivity was 80% of pre go-live levels. Felixstowe added that nearly 5,000 containers were loaded to rail and over 21,000 road hauliers serviced, while average haulier turnaround times have stabilised at 46 minutes.

Confirming there has been no additional issues since its last report on 5 July and stressing its continued work to improve productivity, the port stated: “Vessel and rail loading performance remain below the targets we need to achieve. We are working to reduce further the number of rail misses and we recognise that performance in all areas is not good enough.”

Improvement initiatives

It said several initiatives have been implemented to improve yard operations and productivity, which are expected to improve vessel, rail and road loading cycles and times.

A new area for empty storage will be opened behind berths eight and nine on 14 July. The new yard will provide capacity for an additional 4,200 teus of empty storage and is designed to facilitate quicker loading of empties to outbound vessels.

“We are continuing to work closely with our shipping line customers to minimise disruption,” the port stated.

Source: Port Strategy