SHIPPERS FACE UNCERTAIN SUPPLY CHAIN IMPACTS AS IMO 2020 APPROACHES

On 19th August, American Shipper reported that those without direct interest in ocean shipping may not understand the potential impact of the IMO 2020 regulations could have on global trade.  They take effect from 1st January and are likely to raise fuel prices for marine fuel, but also diesel fuel for vehicles, and could have broader implications across the supply chain.  The article explains that IMO 2020 is a low-sulphur emissions regulation.  The International Maritime Organization (IMO) has directed that sulphur emissions of oxide in the marine sector be reduced by over 80%.  Vessel operators have 2 approaches they can take – use ultra-low-sulphur fuels or install a so-called “exhaust scrubber” that will clean the vessel’s emissions and reduce the emissions.  For sea cargo, whichever option container line operators choose the cost and impact is likely to be enormous.  It is estimated that shipping will see a $50 billion to $60 billion increase in annual fuel costs, with container lines facing $12 billion in additional fuel costs.  Goods may take longer to traverse shipping lanes as container lines slow vessel speeds to burn less fuel.

https://www.freightwaves.com/news/shippers-face-uncertain-supply-chain-impacts-as-imo-2020-approaches

See also –

http://www.imo.org/en/mediacentre/hottopics/pages/sulphur-2020.aspx

The main type of “bunker” oil for ships is heavy fuel oil, derived as a residue from crude oil distillation. Crude oil contains sulphur which, following combustion in the engine, ends up in ship emissions. Sulphur oxides (SOx) are known to be harmful to human health, causing respiratory symptoms and lung disease. In the atmosphere, SOx can lead to acid rain, which can harm crops, forests and aquatic species, and contributes to the acidification of the oceans.  Limiting SOx emissions from ships will improve air quality and protects the environment.  From 1st January, 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). This will significantly reduce the amount of sulphur oxides emanating from ships.

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s