Sleepwalking into obsolescence - IMO 2020 and the shipping industry

11.02.2019

 

In less than a year (1 January 2020 to be exact), the International Maritime Organisation (IMO) will implement new emission standards in a bid to cut down the pollution caused by the shipping industry. These will have a wide-ranging impact on the industry, yet despite having been publicly announced back in 2016, shippers and carriers still seem unprepared.

Sulphur emissions have long been known to harm wildlife and vegetation and have been linked to respiratory conditions in humans. It’s no surprise the shipping industry is being asked to take action. A key facet of the new rules is to ban shipping vessels from using fuel with a sulphur content of more than 0.5%. At present, it’s estimated that the most widely used fuels have 2.7% sulphur content.

Uncertainty and a lack of planning

From a cost perspective, the legislation is no more alarming than the global events that affect the shipping industry on a regular basis. The low sulphur surcharge in the Baltics (a more stringent measure, limiting sulphur emissions to just 0.1%), the Suez Canal surcharge, war risk surcharges, the Hanjin bankruptcy… to name just a few. In each of these instances the market adapted and has done so since the shipping industry was first developed.

Yes, there will be a cost and nobody really knows exactly what that will be (research by maritime research consultancy Drewry found that just 10% of shippers had actually carried out a cost assessment…), but things won’t grind to a halt. No, what makes IMO 2020 unique is the uncertainty surrounding its enforcement by the different legal bodies across the globe.

What is clear is that between 31 December 2019 and 1 January 2020, ocean vessels can’t just drop in for a refuel. So what will happen? Will vessels be detained in ports until they are compliant? Will there be penalties, or will there be a more lenient approach during a transitional phase? Nobody knows and that’s why people are panicking.

Wake up and smell the sulphur!

The truth is that the shipping industry has sleepwalked into this situation. Four years to prepare, but instead everyone adopted a ‘head in the sand’ approach. Will ships stop sailing come 2020? No, but there will be a global impact.

At TenderEasy we deal with shorter and shorter code cycles and continually update our solutions to ensure they function properly. We are constantly changing codes and programming languages to keep our product at peak performance. But, that’s not enough. We’re also developing features to take advantage of new opportunities and stay ahead of the competition. That’s how it’s always been in software. Stay ahead or become obsolete.

That’s not been the case for the shipping industry, but it looks like that might be about to change. Becoming obsolete is exactly what’s in store for HFO propelled vessels come January 2020. Low-sulphur fuel, installing scrubbers or using other forms of fuel are all options that need to be considered and time is running out. The only way to mitigate the impact of the new rules is to be prepared… or go obsolete.

 

Written by
Fredrik Nergell

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