The coming of a new year often holds promise for the future. With the coronavirus pandemic dominating center-stage last year, many have their eyes keenly focused on new beginnings with the start of 2021. For some in the maritime industry, especially owners and operators of commercial vessels involved in international trade, 2021 brings a new set of guidelines for protecting vessels—the International Maritime Organization’s (IMO) guidelines on maritime cyber risk management.

These new guidelines, a milestone for maritime safety and security, are the product of collaboration and hard work among shipping industry leaders and IMO Member States. Some in the shipping industry consider this development to be game changing. Whether game changing or not, implementation of this new model is a vital step toward forging a uniform approach for combating cyber threats against vessels.

Notably, however, the 2021 guidelines leave an equally vital, and maybe just as vulnerable, part of the shipping industry—port facilities—without a similar set of principles. Now that the IMO’s vessel guidelines are in the implementation phase, Member States and maritime industry leaders should again prioritize cybersecurity and collaborate at the IMO to develop uniform cybersecurity standards for port facilities.

The IMO and International Maritime Regulation

Before exploring the need for port facility cybersecurity standards, it may be useful to review the IMO’s role in developing international regulations. In 1948, the Member States of the United Nations created the IMCO, which changed its name to IMO in 1982, to facilitate global cooperation with regulation and practices of shipping engaged in international trade. The IMO’s goal is to ensure safe, secure, and sustainable shipping, facilitating trade and friendly relations among all states. Because shipping is historically and inherently an international endeavor, the IMO depends on and promotes cooperation among its 174 Member States to build uniform regulations that support this essential goal. The IMO construct has remained durable and inclusive since its inception.

Few maritime regulatory regimes exemplify the IMO’s impactful work across the globe more than the International Convention for the Safety of Life at Sea (SOLAS). SOLAS is a treaty from the early 1900s drafted in response to, among other things, the infamous sinking of the RMS Titanic. After its initial adoption in 1914, SOLAS further evolved via multiple conventions over many years with the last convention adopted in 1974. Consequently, the treaty is commonly referred to as SOLAS 1974.

In general terms, SOLAS establishes minimum safety standards related to ship construction, equipment, and operation. Countries party to the treaty ensure vessels under their flags comply with SOLAS’s terms by way of nationally administered certification programs. At the time of this writing, 166 countries, representing about 99 percent of the world’s shipping tonnage, were contracting parties to SOLAS 1974.

Although the last SOLAS convention was adopted in 1974, the treaty has been amended various times since then via the IMO’s “tacit acceptance” procedures. And like SOLAS itself, these amendments often followed tragedy, such as when the International Safety Management (ISM) Code was added as a chapter of SOLAS after a 1987 ferry accident in Belgium killed nearly 200 people. Because casualty investigators found the company’s poor safety culture contributed to the accident, IMO Member States developed the ISM Code, a global safety management standard, to combat what one investigator called the “disease of sloppiness” on ships and ashore. Entering into force in 1998, the ISM Code has made “shipping safer and cleaner” for more than two decades.

The IMO’s 2021 Cyber Guidelines

The ISM Code serves as the foundation upon which IMO Member States have built the 2021 guidelines for cyber risk management. The guidelines were consigned in 2017 via three key declarations. First, in Resolution MSC.429(98), Maritime Cyber Risk Management in Safety Management Systems, the IMO affirmed a view that the ISM Code already requires mitigation of cyber risks. Per this view, cyber risk management is already encompassed in the code’s existing general requirement that companies establish safeguards against all risks to ships, personnel, and the environment.

Resolution MSC.429(98) also contains a second important declaration. In it, the IMO encouraged countries to “appropriately address” this preexisting requirement no later than January 1, 2021. Put in more practical terms, now that the anticipated deadline for IMO’s cyber guidelines has arrived with the start of this new year, the IMO encourages Flag States not to issue compliance documents to vessels if cyber risks are not appropriately addressed in the respective safety management system.

The third important IMO declaration is in a July 2017 circular, in which the IMO announced that its Maritime Safety Committee (MSC) and its Facilitation Committee jointly approved specific cyber risk management guidelines. Member States developed these non-mandatory guidelines in partnership with shipping industry leaders to promote compliance with the aforementioned preexisting ISM Code requirement to mitigate cyber risks. In the July 2017 circular, the IMO recommends vessels and Flag States utilize the guidelines during compliance checks to assess whether cyber risks have been appropriately addressed.

As a risk management regime, the ISM Code is expected to adapt well to the management and mitigation of cyber risks. Government officials and maritime industry leaders, experienced from roughly 18 years of ISM Code practice, are expected to rise to the challenge of applying the code in the emerging cyber arena. Moreover, by identifying in the ISM Code a preexisting, albeit seemingly dormant, cyber requirement and then complementing that requirement with non-binding industry guidelines, Member States avoided the lengthy process of amending SOLAS 1974 and the ISM Code.

This is all to say, harnessing the ISM Code’s risk management framework to mitigate cyber threats was an efficient approach. In 2021, Flag States will begin to utilize this approach and work toward global uniformity.

The Work that Remains to Secure Ports

SOLAS 1974 has been amended numerous times, often to implement subsidiary regulations such as the ISM Code. Another subsidiary regulation within SOLAS is the International Ship and Port Facility Security (ISPS) Code, the IMO’s comprehensive mandatory security regime developed after a different tragedy—the 9/11 attacks. Interestingly, as the IMO’s new model for addressing cyber threats was being considered, the MSC reported, via MSC 97/22, that some Member States felt ISPS might be more suitable for addressing cyber threats. Nonetheless, seemingly moved by the United States’ 2017 assertion that the ISM Code’s “application is sufficiently wide to include emerging risks associated with cyber-enabled systems,” the IMO chose to harness the ISM Code, not ISPS, to promote global maritime cyber standardization.

While tapping into the ISM Code’s wide framework was efficient, such resourcefulness also came with a major limitation. Unlike the ISPS Code that covers certain ships and the port facilities that serve them, the ISM Code, even with its broad risk management concepts, applies only to vessels. This limitation means owners and operators of port facilities around the world will not reap the protective benefits realized with 2021’s implementation of IMO’s new cyber guidelines.

Port facilities play a vital role in global trade and rely heavily on technology to operate. As the May 2020 incident at Iran’s Shahid Rajaee port terminal demonstrates, a cyberattack at a port facility can be crippling. Since 2017, each of the four biggest maritime shipping companies in the world have been the victim of a cyberattack, with a recent attack taking place only a few months ago in September 2020. Considering these events, one should have no doubt that port facilities across the globe are presently vulnerable to cyber threats and the potential that these vulnerabilities will be exploited is undeniably real.

With the reality of cyber threats in mind, Member States and maritime industry leaders should collaborate at IMO to develop uniform cybersecurity standards for port facilities, just as they did to protect vessels. Coincidentally, in 2016 the Islamic Republic of Iran offered this exact proposal to the MSC. In MSC 97/4, Iran stressed the critical need for cyber risk management guidelines specific to ports. This proposal, somewhat prophetically considering the 2020 events at the Port of Shahid Rajaee, underscored the serious consequences a cyberattack could have on a port and on critical infrastructure.

While the MSC did not act on Iran’s proposal, in December 2016 the MSC expressly thanked Iran for its recommendation and “invited interested Member States to submit a proposal” for consideration at a future MSC session. No record has been found that any Member State has submitted such a proposal. Now is the time for Member States to accept the invitation.

Conclusion

The IMO’s guidelines for managing cyber risks on vessels are a key development for the shipping industry. Flag States and shipping companies worldwide now have an industry-sponsored framework from which to recurringly assess cyber safeguards on ships. There is more work to be done, however, to appropriately protect the rest of the maritime transportation system. Like Flag States and their vessels, Port States and their ports require guidelines to ensure cyber risks are uniformly addressed at maritime facilities. With 2021 finally ushering in cyber standards for vessels, now is the time for Member States, in partnership with the maritime industry, to assemble at the IMO and develop similar standards to secure ports across the globe.

Commander Michael C. Petta, USCG, serves as Associate Director for Maritime Operations and professor of international law in the Stockton Center for International Law at the U.S. Naval War College. The views presented are those of the author and do not necessarily reflect the policy or position of the U.S. Coast Guard, the Department of Homeland Security, the U.S. Navy, the Naval War College, or the Department of Defense.

This article appears courtesy of CIMSEC and may be found in its original form here. 

Life itself arose from the oceans. The ocean is vast and covers 140 million square miles, some 72 per cent of the Earth’s surface. The ocean has always been an important source of food for the life it helped generate, and from earliest recorded history it has also served trade and commerce, adventure and discovery. It has separated and brought people together.

Even now, when the continents have been mapped and their interiors made accessible by road, river and air, most of the world’s people live no more than 200 miles from the sea and relate closely to it.

Freedom of the Seas

The oceans had long been subject to the freedom of-the-seas doctrine – a principle put forth in the 17th century, essentially limiting national rights and jurisdiction over the oceans to a narrow sea belt surrounding a nation’s coastline. The rest of the seas were declared free for all and belonged to none. While this situation lasted into the twentieth century, by mid-century there was an impetus to extend national claims over offshore resources.

There was a growing concern over the toll taken on coastal fish stocks by long-distance fishing fleets and over the threat of pollution and wastes from transport vessels and oil tankers carrying noxious cargoes that plied sea routes across the globe. The threat of pollution was always present for coastal resorts and all forms of ocean life. The navies of the maritime powers were competing for a worldwide presence in surface waters and even under the sea.

United Nations Law of the Sea Convention (UNCLOS)

The United Nations is working to ensure the peaceful, cooperative, legally defined uses of the seas and oceans for the individual and common benefit of humankind. Urgent calls for an effective international regime over the seabed and the ocean floor beyond a clearly defined national jurisdiction set in motion a process that spanned 15 years and saw the creation of the United Nations Seabed Committee, the signing of a treaty banning nuclear weapons on the seabed, the adoption of the General Assembly’s declaration that all seabed resources beyond the limits of national jurisdiction are the common heritage of mankind, and the convening of the Stockholm Conference on the Human Environment.

The UN’s groundbreaking work in adopting the 1982 Law of the Sea Convention stands as a defining moment in the extension of international law to the vast, shared water resources of our planet. The convention has resolved several important issues related to ocean usage and sovereignty, such as:

• Established freedom-of-navigation rights
• Set territorial sea boundaries 12 miles offshore
• Set exclusive economic zones up to 200 miles offshore
• Set rules for extending continental shelf rights up to 350 miles offshore
• Created the International Seabed Authority
• Created other conflict-resolution mechanisms (e.g., the UN Commission on the Limits of the Continental Shelf)

Protection of marine environment and biodiversity

The UN Environment Programme (UNEP), particularly through its Regional Seas Programme, acts to protect oceans and seas and promote the sustainable use of marine resources. The Regional Seas Conventions and Action Plans is the world’s only legal framework for protecting the oceans and seas at the regional level. UNEP also created The Global Programme of Action for the Protection of the Marine Environment from Land-based Activities. It is the only global intergovernmental mechanism directly addressing the link between terrestrial, freshwater, coastal and marine ecosystems.

The United Nations Educational, Scientific and Cultural Organization (UNESCO), through its Intergovernmental Oceanographic Commission, coordinates programmes in marine research, observation systems, hazard mitigation and better managing ocean and coastal areas.

The International Maritime Organization (IMO) is the key United Nations institution for the development of international maritime law. Its main task is to create a fair and effective, generally accepted and implemented legal framework for the shipping industry.

Marine shipping and pollution

To ensure that shipping is cleaner and greener, IMO has adopted regulations to address the emission of air pollutants from ships and has adopted binding energy-efficiency measures to reduce greenhouse gas emissions from international shipping. These include the landmark International Convention for the Prevention of Pollution from Ships of 1973, as modified by a 1978 Protocol (MARPOL), and the 1954 International Convention for the Prevention of Pollution of the Sea by Oil.

Polar Code

In 2017, the International Code for Ships Operating in Polar Waters (Polar Code) entered into force. The Polar Code covers the full range of design, construction, equipment, operational, training, search and rescue and environmental protection matters relevant to ships operating in the inhospitable waters surrounding the two poles. It was an important regulatory development in the field of transport and trade facilitation, alongside a range of regulatory developments relating to maritime and supply chain security and environmental issues.

Piracy

In recent years there has been a surge in piracy off the coast of Somalia and in the Gulf of Guinea. Pirate attacks are a danger to the welfare of seafarers and the security of navigation and commerce. These criminal acts may result in the loss of life, physical harm or hostage-taking of seafarers, significant disruptions to commerce and navigation, financial losses to shipowners, increased insurance premiums and security costs, increased costs to consumers and producers, and damage to the marine environment.

Pirate attacks can have widespread ramifications, including preventing humanitarian assistance and increasing the costs of future shipments to the affected areas. The IMO and UN have adopted additional resolutions to complement the rules in the Law of the Sea Convention for dealing with piracy.

The United Nations Office on Drugs and Crime (UNODC), through its Global Maritime Crime Programme (GMCP) combats transnational organized crime in Africa focusing on countering piracy of the Horn of Africa and Gulf of Guinea. The programme has delivered support to states in the region by carrying out trials and imprisonment of piracy suspects as well as developing maritime law enforcement capabilities through the facilitation of training programmes. From the piracy prosecution model, prisoner transfers and training of members in the judicial system of the Atlantic and Indian Ocean, to full-time mentoring to coast guards and police units in Somalia, Kenya and Ghana, the UNODC GMCP has accomplished many successes in a challenging environment. This has been achieved through a variety of programmes aimed at promoting maritime safety and bolstering the countries’ rule of law and justice systems.

Resources:

• Related stories from the UN system
• United Nations Convention on the Law of the Sea (IMO)
• Oceans and Law of the Sea
• Oceans and Seas (UNEP)
• Review of Maritime Transport (UNCTAD)

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In 2018, the International Maritime Organisation (IMO) received widespread support when it announced a landmark strategy to reduce shipping emissions. It outlined a plan to reduce carbon emissions intensity by at least 40 per cent compared with 2008 levels by 2030, and by at least 70 per cent by 2050, as well as reducing total emissions by 50 per cent by 2050, thereby ensuring that the international shipping industry plays its part in helping to achieve the objectives of the Paris Agreement. Reducing shipping emissions is a vital component of the fight against global climate change, yet greenhouse gas emissions from the maritime sector are increasing. According to an IMO study published last month, emissions are projected to increase by as much as 130 per cent by 2050 compared with 2008 levels if mitigation measures are not urgently put in place. This is an important issue for the global commodities trade, which is a major user of the shipping fleet. It is time to consider radical measures to close the competitiveness gap between carbon-intensive fuels and low or zero-carbon alternatives. The IMO has immense influence, for instance new rules brought in by the IMO since the beginning of the year have forced the use of shipping fuels with stricter sulphur standards, and further ship efficiency improvements are in the pipeline. We propose the IMO now use its influence to incentivise greater use of low- or zero-carbon maritime fuels. The ships in use, the fuels that power them and the related infrastructure all need to change. Trafigura believes the best way of promoting such change is through the adoption of a market-based measure that would charge a levy on carbon-intensive shipping fuels and subsidise low- and zero-carbon fuels. To this end, we have just submitted a proposal to the IMO for a partial “feebate” system to decarbonise global shipping. We propose a self-financing system where a levy is charged on the use of fuels with a CO2-equivalent intensity above an agreed benchmark level, and a subsidy is provided for fuels with a CO2-equivalent profile below that level. It is now time to put a price on carbon emissions in the shipping industry Our own in-depth analysis and commissioned independent research indicates that the levy should be between $250-$300 per tonne of CO2-equivalent. While primarily bridging the cost gap between carbon intensive and low or zero carbon fuels, this partial “feebate” would also raise billions of dollars for research into alternative fuels and could help assist small island developing states and other developing countries mitigate the impact of climate change. The idea of taxing carbon in shipping is not new. Indeed, the European Commission has just put forward a proposal to include shipping in its emission trading system as part of updated climate goals. But our approach builds on a number of proposals from the shipping industry including that the IMO establish a research and development programme financed by a global tax of $2 per metric tonne of bunker fuel. Our proposal is different in that it would create a genuine market-based measure — a partial “feebate” system — to reduce emissions, together with funding for R&D and for climate change-affected small island developing states. The carbon levy would need to be adjusted as economies of scale are found in the production of lower-carbon fuels and the cost competitiveness gap narrows. Twice weekly newsletter Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here. The initial levy of between $250-$300 per tonne of CO2 equivalent may sound high, but we believe it is necessary. As one of the world’s largest charterers of vessels, responsible for more than 4,000 voyages each year, we recognise that a carbon levy will have an immediate effect on shipping costs which companies — including ours — would bear. This increase in operational costs will spur charterers to change behaviour to reduce emissions, charter more efficient ships and switch to lower carbon fuels. Great efforts have been made in recent years through the Global Maritime Forum, the Getting to Zero Coalition and through other initiatives to create awareness, develop solutions and catalyse a modern maritime sector to take responsibility for its climate impact. It is now time to put a price on carbon emissions in the shipping industry in the form of a global, mandatory industry levy. Jose Maria Larocca is executive director at global commodity trader Trafigura. Rasmus Bach Nielsen is head of fuel decarbonisation at Trafigura. The Commodities Note is an online commentary on the industry from the Financial Times

Source: ft.com

In 2016, the IMO set out new mandatory requirements on electronic data interchange, stating that national authorities have until April 2021 to establish systems for the electronic exchange of information to assist ship clearance processes.

Many port states have already established such systems (maritime single windows) for the exchange of so-called administrative data. However, also port operational data, like notifications and timestamps, as well as nautical data, are part of such exchange of data, which in combination will pave the way for more efficient port operations.

“The software platforms which link ship and shore communication may differ on national levels, and therefore, we should call for international guidelines for the electronic data interchange, using common standards. This is to ensure that all actors in the port process make use of an identical data structure and common interfaces when exchanging information,” says Jeppe Skovbakke Juhl, Manager, Maritime Safety and Security, adding,

“With more than 95,000 ships operating nationally and internationally between approximately 9,000 ports, globally agreed methods and standards to interact and interface are prerequisites for maritime digitalization to succeed.”

Proposal on the table from BIMCO

For FAL 44, BIMCO has co-authored a proposal (FAL 44/18/2) for developing international guidelines for the electronic interface between ship and shore, and for all actors in the port call operation.

The proposed guidelines will ensure interoperability between port stakeholders and ships and facilitate electronic interaction between ports worldwide. This will optimise the efficiency of both ports and ships, and in turn, benefit the global supply chain.

“Although a bit technical, such guidelines should provide the necessary information on authentication of the users, integrity and confidentiality, but also include technical requirements. This could be service interface descriptions, data structures used by the service(s), dynamic behaviour of the service(s) and sequence of operations. This also covers technical issues like choice of protocols and technology for data exchanges, taking due consideration of international standards developments,” Juhl explains.

“A positive side effect of the COVID-19 pandemic is that we have been forced to re-examine our daily routines in shipping, taking a gigantic leap forward by establishing digital solutions. The IMO framework is a huge step forward for harmonising the machine-to-machine data exchange communication,” Juhl says.

Timing is extremely important to avoid local or regional standards being implemented. Therefore, BIMCO also calls for the establishment of a robust roadmap and time plan for the completion of an electronic information exchange framework in general, allowing all stakeholders to aligning national projects with the IMO progress. The schedule should also include completion of IMO reference data model and guidance.

Source: bimco

Some 400,000 seafarers from across the globe are now stranded on ships, continuing to work but unable to be relieved, in a deepening crew change crisis which threatens trade and maritime safety.

During a high-level event on the margins of the United Nations General Assembly (24 September), Captain Hedi Marzougui, who was in command of a vessel between December 2019 and May 2020, appealed to Governments to act to allow seafarers to come home.

“Not knowing when or if we will be returning home brings a severe mental toll on my crew and myself,” Captain Marzougui said. “I would encourage each and every one of you to think of how you would feel, if you had to work every day, for 12 hours, with no weekends, without seeing your loved ones, and trapped at sea. Now add that you have to do that with no idea of when you will be repatriated.”

The COVID-19 pandemic restrictions on travel and transit have severely impacted on seafarers.  Despite multiple pleas to Governments to designate them as essential key workers and to facilitate their travel, the number of seafarers whose contracts have been extended by several months has continued to increase. Some seafarers have now been at sea for 17 months without a break, well beyond the 11-month limit set out in the Maritime Labour Convention (MLC). Besides the 400,000 seafarers stuck at sea, another 400,000 are unable to join ships.

This threatens the fundamentals of ship safety standards which the International Maritime Organization (IMO) has worked to develop over six decades, IMO Secretary-General Kitack Lim (download speech here) told the online event, which brought together leaders from major global businesses, the maritime industry, government, the UN and unions.

“Overly fatigued and mentally exhausted seafarers are being asked to continue to operate ships,” Mr. Lim said. On more than 60,000 cargo ships which continue to deliver vital goods, foods and medicines, ship safety is hanging in the balance, just as seafarers’ lives are being made impossible. The safety of navigation is in peril.”

Secretary-General Lim restated his plea to Governments: “Action is needed – and is needed now. We all depend on seafarers. They should not be the collateral victims in this pandemic. Seafarers deliver for us – and now we need to deliver for them.”

In a statement read out at the event, to mark World Maritime Day 2020, UN Secretary-General António Guterres reiterated his concern for seafarers stranded at sea. He renewed his appeal to Governments “to address their plight by formally designating seafarers and other marine personnel as ‘key workers’, ensuring safe crew changes and implementing the protocols developed by UN agencies, as well as the International Chamber of Shipping and the International Transport Workers’ Federation, allowing stranded seafarers to be repatriated and others to join ships.”

In a letter issued to the UN Secretary General, the CEOs of 30 Consumer Goods Forum companies, including Unilever and Danone, have called on governments to designate seafarers as “key workers” and raised strong human rights concerns, stating: “the situation has also inadvertently created a modern form of forced labour”.

Unilever’s Chief Supply Chain Officer Marc Engel said COVID safe crew changes were needed without delay. “When the ships stop, so does everything else. We are now close to an entirely avoidable breaking point which could ripple out through the economy. Even a temporary interruption could push companies and countries over the edge,” he said. Ms. Henriette Hallberg Thygesen, VP and CEO, Fleet and Strategic Brands at A.P. Moller-Maersk echoed the call for words to be followed by action.

Sanda Ojiambo, CEO and Executive Director of the UN Global Compact, the world’s largest corporate sustainability initiative, encouraged businesses to call on governments to end the labour abuses that seafarers are suffering, noting that the Ten Principles of the UN Global Compact represent pillars of responsible business which “are connected to the humanitarian, economic and safety crisis unfolding on our seas.”

Both Guy Platten, Secretary-General of the International Chamber of Shipping and Stephen Cotton, General Secretary of the International Transport Workers’ Federation called on governments to intervene to end the crew change crisis, warning the numbers of seafarers impacted would only continue to increase without coordinated action by governments.

ILO Director General Guy Ryder called on governments to implement urgent and pragmatic solutions that fully respect seafarers’ rights. “Seafarers are exhausted and simply cannot continue working on board indefinitely,” Mr. Ryder said.

Transport and maritime ministers from Canada, France, Kenya, Panama and the Philippines also addressed the virtual event. They urged other Governments to join them in designating seafarers as essential workers, implementing measures for safe crew change and facilitating COVID-safe transit for seafarers.

The meeting was convened by the UN Global Compact, the International Maritime Organization and the International Labour Organization, in collaboration with the International Chamber of Shipping and the International Transport Workers’ Federation.

A recording of the event can be viewed here: https://bit.ly/3mIKRCV

The International Chamber of Shipping (ICS), which represents the world’s national shipowners’ associations and more than 80% of the world merchant fleet, has published its Annual Review for 2020. The Review covers a broad cross-section of issues in which ICS is engaged on behalf of the global shipping industry.

The Review explores, in depth, the significant issues faced by the industry in 2020, including:

• The impact of COVID-19 and the intensifying crew change crisis – COVID-19 related restrictions on travel and the ability to rotate crew, leaving 400,000 seafarers stranded at sea.
• Efforts to decarbonise shipping, including the ongoing negotiations at the UN International Maritime Organization (IMO) and the radical industry proposal for a USD 5 billion fund to accelerate the R&D of zero-carbon technologies.

This year’s Review offers a comprehensive analysis of ICS’s activities across a wide range of subjects. This includes: piracy in West Africa and the continuing migrant crisis in the Mediterranean; supporting the successful implementation of the IMO 2020 Sulphur Cap and the IMO Ballast Water Management Convention; defending the global pollution liability regime; and pushing for a fundamental review of the STCW Convention on seafarers’ training standards.

The Review is of interest to anyone involved with international shipping, including shipping companies, maritime administrations and policymakers. A full copy of the Annual Review can be downloaded here.

Speaking on the publication of the Annual Review, Esben Poulsson, ICS Chairman said:

“For the global shipping industry, 2020 is a year that will be long remembered. As remarked in this year’s Annual Review, the COVID-19 pandemic has led to significant disruptions to the industry’s way of working. ICS continues to be at the forefront of addressing the ongoing crew change crisis, making every effort to persuade governments to facilitate the repatriation of 400,000 seafarers stranded at sea.”

“While much of this Review necessarily focuses on COVID-19, the vital work of ICS continues, representing the global industry with its global regulators.

“This includes critical work on the reduction of the industry’s CO2 emissions, to which ICS remains fully committed. Last December, ICS, along with industry partners, proposed the establishment of a USD 5 billion global R&D fund dedicated to zero-carbon technologies. Support from governments for this bold initiative will be critical if we are to deliver on the ambitious IMO objective to at least halve total emissions from shipping by 2050.”

“As we move into ICS’s centenary year, which will hopefully be far less challenging than 2020, there is still much work for ICS to do in helping to shape the future of shipping.”

SINGAPORE: China’s exports of clean marine fuel in August hit a high for the year, customs data showed on Friday, along with total exports of goods rising the most in nearly one and half years as more economies reopened from lockdown.

Exports of very low-sulphur fuel oil (VLSFO), with a maximum sulphur content of 0.5% to comply with emission rules set by the International Maritime Organization (IMO), rose to 1.62 million tonnes, data from the General Administration of Customs showed.

That was up from 1.18 million tonnes in July. Exports for the first eight months of 2020 totalled 9.26 million tonnes, the customs data showed. Fuel oil imports into bonded storage, which include both high-sulphur and low-sulphur materials, totalled 671,376 tonnes in August.

Part of the high-sulphur imports could be for deliveries into bonded storage against the futures contracts traded at the Shanghai Futures Exchange. Chinese refineries have expanded their production capacity of VLSFO amid Beijing’s push to reduce its reliance on imports of bunker fuel used to power ships and to create its own marine fuel hub to supply northern Asia.

Plants began exporting VLSFO in January after Beijing offered tax incentives to boost local production. However, only state-owned refiners China Petroleum and Chemical Corp, China National Petroleum Corp, China National Offshore Oil Corp and Sinochem Corp, along with private refiner Zhejiang Petrochemical Corp are allowed to export under a combined quota of 10 million tonnes.

The table below shows China’s fuel oil imports and exports, all in metric tonnes. The column of exports under bonded storage trade largely captures China’s VLSFO bunkering sales along its coast.

Source: energy.economictimes

In a wide-ranging interview with Container News, the International Maritime Organization (IMO)’s container experts Alfredo Parroquín-Ohlson and Bingbing Song, have addressed many of the key issues arising from this year’s Cargo Integrity Campaign, ahead of the Maritime Safety Committee (MSC 102) meeting later this month.

The campaign has sought to shine a light on the issues that those in the industry consider to be the key safety and regulatory concerns for cargo owners, crew, ship operators and others with an interest in the safe and secure movement of cargo.

One of the most common complaints from industry is the failure of member states to implement IMO regulations uniformly, and in some cases the failure has consequences. The implementation of the Verified gross mass (VGM) rules have been beset with difficulties, given that the UK imposes a £20,000 fine for transgressions whereas the Dutch government fines for a similar transgression attracts the equivalent of a £300 pound fine.

It is a difficulty that the IMO recognises, and the organisation started mandatory member state audits in 2016, with an audit team (formed of auditors nominated by other Member States) looking into the implementation of IMO rules by another member state. All the audits are confidential, unless the audited state decides to make the review public. The audits cover responsibilities of IMO Member States under a number of IMO treaties, including SOLAS.

All member states will be audited, with new ways of working during the pandemic, the reviews look at what the member states’ responsibilities are, including the reporting requirements, how they carry out their functions.

Access to the full audit reports are limited, however, if a certain section of the IMO, the cargoes section for example, wants to see the outcome of an audit they can access that related subject and the IMO will then be able to offer support to the member state through technical co-operation.  This has led to targeted capacity building work said an IMO spokeswoman

Parroquín-Ohlson explains that there are noticeable differences in the way that rules are applied between states, but he says “It reflects on the way they apply regulations, but it’s because of the different capabilities of the countries involved, and the different capacities of countries to deal with regulations.” That could be for instance a lack of personnel or a lack of training.

One of the critical factors is getting new regulations translated into national law and the audits have identified a lack of maritime lawyers within the maritime transport administrations in some states to deal with that process. As a result IMO has been running seminars to address this challenge.

This has led to targeted capacity building work said an IMO spokeswoman.

Differences in the application of regulations along with the decisions of some jurisdictions, notably the US Federal Maritime Commission and European Union, to regulate regionally, has exposed the cumbersome nature of regulation at the IMO.

Song acknowledges the difficulties. “This is one of our challenges,” he said. “Regional and different regulations and the fragmentation of regulations is adding complexity and burdens on industry and everyone involved. But when it comes to cargo related regulations we have good examples regarding harmonisation.”

The shipping industry has a good record, with a lot of international regulations, the UN has an Orange Book with recommendations covered in all transport modes. IMO has taken care of maritime provisions the International Civil Aviation Organisation has covered their part for air transport. “There is already very good collaboration between the sectors.” The aim, ultimately, is the harmonisation of regulations on the movement of cargo on a multimodal modality,” said Song.

Nowhere is the need for further harmonisation of regulations more critical than in cases where safety is an issue. Harmonisation requires collaboration and both Parroquín-Ohlson and Song agree that cargo fires on board ships must be tackled as an urgent issue by the regulator.

Carriage regulations are required to help vessel operators understand what is inside a container, so that it can be handled correctly in transit, and should there be an incident on board, but also fire detection and firefighting regulations are needed to make certain that when there is a fire on a ship, the crew have the equipment to deal with it.

Of all the issues raised on this website since February perhaps one of the most contentious has been the increase in fires on board container ships, largely due to the misdeclaration of hazardous cargo, either intentionally or through a lack of knowledge.

More cargo on larger ships built to regulations that even the regulator, the IMO, believes need updating. Parroquín-Ohlson pointed out that not all fires on board a container ships are initiated by cargo, and the cause can often be unsubstantiated.

Nevertheless, whatever ignited the blaze the issue of fighting fires on board a container vessel remains contentious. The fire safety and regulatory regime under which vessels are designed and operated is considered by some in the industry to be obsolete, given the increased size of container ships, the size of stacks and numbers of containers on board the latest ships.

It is an issue that will be raised at the IMO’s Maritime Safety Committee (MSC) 102 later this month, confirmed Parroquín-Ohlson, and Song also pointed out that while there was a “Compelling need to review container ship design regulations on fire protection, detection and extinction arrangements,” there had been amendments to the SOLAS Convention, the Safety Of Life At Sea regulations, and the IMO’s safety code.

Song also pointed out that one of the effects of the pandemic has been to delay the development of regulation and that MSC 102 should have taken place in the spring of 2020, even so the IMO intends to take steps to improve the regulations concerned with firefighting equipment on board the growing number of ships that are also increasing in size posing new challenges for designers and crew, not to mention those ensuring that cargo in containers is correctly declared and stowed.

According to Song, “We have received several proposals to look into the firefighting regulations and fire protection regulations,” and he went on to say, “I believe there is a general desire from the member states and from the international organisations to take further steps towards improving the current situation regarding container ship fires.”

Nevertheless, Song added, “I firmly believe that, tackling the misdeclaration and non-declaration of dangerous goods and fires on board container ships must be a collaborative effort, not only regulators, but also shippers, carriers, freight forwarders and all the stakeholders in the supply chain must share the responsibility, everyone has a role to play.”

Clearly, Song is talking about prevention here and it is a refrain that will be supported by most of those in the industry, with the understanding that fighting fire on a cargo ship begins with prevention, and that means knowing what cargo you are carrying and the properties of that the cargo.

According to Song the IMO is getting “Increasing alarms alerting us to the container fires, which could lead to misdeclaration and non-declaration of dangerous goods as a major cause of shipboard fire, I cannot tell if it’s exactly, or only because of that, but more and more it is pointing in this direction,” said Song.

Knowing precisely what is in each and every container is “Very difficult to verify,” conceded Parroquín-Ohlson, given the sheer numbers of containers involved, adding that some ports use scanners, “But that’s not suitable for all ports.”

He also pointed to the random container checks, for example those carried out by South Korea which has established a special entity to perform random inspections for export containers, “The intention is to harmonise and enforce the regulations,” said Parroquín-Ohlson.

IMO is open to looking for a procedure that will verify what is in a container, “We need a comprehensive revision of all the regulations to see if we can close this gap, we need a good proposal that we can analyse to see if it can work, for all member states,” explained Parroquín-Ohlson.

Song believes that to “close the gap” there is a need to make sure that cargo is properly identified and declared well before the container reaches the ship, “It cannot be left to the very last stage,” said Song.

Parroquín-Ohlson points out that the Carriage of Cargo and Containers (CCC) sub-committee at the IMO is currently carrying out a, “Comprehensive revision of all the special provisions contained in the International Maritime Dangerous Goods Code to see if they can close this gap to the special provisions contained in the code to minimise the misdeclaration of dangerous goods.”

However, he emphasised, “It’s a good initiative, but we recognise that we are trying to eliminate intentional non-declaration of the cargo, you can modify the whole code but it won’t work because there is an intention behind it, to avoid hazardous cargo regulations and costs.” He added, “Misdeclaration can be a mistake, but non-declaration is a criminal act.”

Finding the non-declared, criminal cargo is a difficult problem, there are few methods of identifying these hazardous cargoes, with the very high number of containers it is difficult to inspect the containers.

Asked whether there would be a possibility of ensuring that any new regulation could be uniformly applied Parroquín-Ohlson responded that it is the intention for the regulations and the “spirit” of the rules is for them to be applied equally, across the globe.

Pointing to the application of the rules on verified gross mass (VGM) Parroquín-Ohlson says there is very little wriggle room in the regulation, “but there is no harmonised way to implement this in the member states, but the idea is to harmonise,” he said.

According to Parroquín-Ohlson the technical rule is clear and leaves very little doubt on its application, but when it comes to fines and the local application of the regulation, “it is very difficult for IMO to intervene”.

For firefighting, knowing what is in a container is clearly crucial, knowing how much a container weighs is also critical for loading patterns and the safety of crew and the vessel, not to mention the integrity of other cargoes. Collapsing container stacks are a risk to crew and the size of vessels has again come under scrutiny as stacks have become higher.

Lashing has also become an issue with crew complaining of having to lash containers on moving vessels under dangerous conditions and often these crew are untrained or relatively new to the industry.

Both Song and Parroquín-Ohlson made the distinction between lashing operations in the loading port, and reinforcement of lashing that often occurs at sea to tighten twistlocks or lashing rods to make certain that cargo is secure during transit, or the more complex manoeuvring necessary to handle heavy lashing rods during lashing or unlashing operations, on a moving vessel.

However, Parroquín-Ohlson said that, as a former seafarer he had performed lashing duties, but he emphasised that specific training would be beneficial before crew carry out these duties in port or in transit, but it is not the place for the secretariat to push the member states into a particular direction.

Song added that the issue is a critical one, it is necessary to raise awareness of the safety issues related to lashing work. He went on to say the loss of life due to the obvious dangers associated with these tasks is one of great regret, he added that the secretariat is ready to help to improve the situation and facilitate further regulatory development, depending on the wishes of the member states.

The IMO secretariat has limited remit to raise these issues without a particular proposal from a member state. It is important to appreciate further that anyone raising this issue through a proposal to the IMO must understand that this is not only a lashing issue, but also a human element issue.

Lashing issues themselves are complex due to the various jurisdictions that the regulations governing them fall under, including whether it is dockers or crew who should be handling the securing of cargo. Often these safety issues are circumvented by vessel operators by requiring crew to undertake the work before a vessel docks. In this way the vessel’s cargo operations can expedited.

That communication between vessel and port is relatively straight forward, but when it comes to communicating what is in a container, how it is stored when it is offloaded, or delivered to the port for export, the jurisdictions are clear. But the interface between port and vessel can help prevent the kind of tragedies seen in Beirut in August, where a cargo of ammonium nitrate exploded killing around 200 people and destroying a large part of the city and the city’s businesses.

IMO has non-mandatory recommendations on the handling of dangerous goods in port areas and even though these are merely recommendations, but “IMO does have a role to play to improve the implementation by the individual member states and to assist in improving the capacities of individual member states in different areas and the handling of specific dangerous goods,” said Song.

IMO is willing to help and the organisation has room to contribute, but IMO depends on the willingness of the member state to co-operate and to properly implement regulations.

The IMO says it can help advise ports with the safe storage of dangerous cargoes, such as the 2,700 tonnes of ammonium nitrate that exploded in Beirut in August this year.

Parroquín-Ohlson also highlighted the section within the IMO recommendations on handling dangerous goods in port areas where “there is a distinction between keeping or storing dangerous cargoes, and those in transit. Cargo kept temporarily in the port area as part of the transport chain are not considered as being stored. Storage involves the holding of cargo for an indeterminate period not directly involved with the transportation process.  Authorities may wish to regulate the storage of such cargoes through other regulations unconnected with the transportation process,” he said.

The difference is not so much defined by time, said Parroquín-Ohlson, but is determined by whether there is an onward destination for the goods, he pointed out that the tragedies in both Beirut and five years ago in Tianjin, China, the cargo was not in transhipment, but was stored at the port. The existing provisions for stowage and segregation for transport should be observed for storage in port.

IMO added that over the past year there has been an increased effort to improve the contact between vessel and port operators, it is an issue that the secretary general Kitack Lim is close to, having come from the port sector himself, Lim joined IMO from Busan Port.

Lim has been liaising with the ports to develop the contact and that critical interface, and the increase in digitalisation is facilitating that change. A lot of work has already happened in this regard, including a recent webinar on the illegal trafficking of wildlife for instance.

A part of this work is related to clearance of ships and cargo. Electronic data exchange is now mandatory under IMO’s Facilitation Convention and a “single window” is recommended – so that all the stakeholders along the supply chain are seeing the same data, at the same time, transmitted through a single point of contact digitally. There have been suggestions that better communication among relevant authorities could have helped prevent the Beirut explosion.

IMO’s Facilitation Committee is considering proposals to make the single window mandatory.

Source: container-news

The “bunker”, which is the main consumable for ships, is Fuel Oil obtained by the distillation of crude oil. Crude oil contains sulfur, which causes harmful emissions after combustion in ship machinery. Sulfur oxides (SOx) are extremely harmful to human health. It is known to cause respiratory distress symptoms and lung diseases. SOx in the atmosphere contributes to acid rain that can harm all living creatures, crops, forests, all kinds of water basins, as well as those living in these waters, without minding wild or modern.

In general, limiting SOx emissions caused by the use of fossil fuels will increase the air quality in the atmosphere and protect living things and the environment.

IMO regulations to reduce sulfur oxide (SOx) emissions from ships first came into force in 2005 under Annex VI of the International Convention for the Prevention of Pollution from Ships (known as the MARPOL Convention). Since then, the limitations on sulfur oxides are getting stricter.

Simply put, limiting sulfur oxide emissions from ships reduces air pollution and provides a cleaner living environment. The reduction of SOx also helps to reduce the small harmful particles that are generated when fuel is burned.

IMO monitors the sulfur content of fuel used in ships globally. The latest figures show that the annual average sulfur content of residual fuel oils tested in 2017 was 2.54%. In 2017, the worldwide average sulfur content for distillate fuel was 0.08%.

Since 1 January 2015, the sulfur limit for Fuel Oil used by ships operating in the Emission Control Areas (ECA) designated by IMO for the control of sulfur oxides (SOX) has been 0.10% m / m. ECAs for SOx created under MARPOL Annex VI are: Baltic Sea region; North Sea region; North America region (includes designated coastal areas other than the United States and Canada); and the United States Caribbean Sea region (waters around Puerto Rico and the US Virgin Islands).

Since 1 January 2015, the sulfur limit for Fuel Oil used by ships operating in the Emission Control Areas (ECA) designated by IMO for the control of sulfur oxides (SOX) has been 0.10% m / m. ECAs for SOx created under MARPOL Annex VI are: the Baltic Sea area; the North Sea area; the North American area (covering designated coastal areas off the United States and Canada); and the United States Caribbean Sea area (waters around Puerto Rico and the United States Virgin Islands).

The time IMO adopted regulations to control air pollution

from ships

IMO has been working to reduce harmful impacts of shipping
on the environment since the 1960s. Annex VI to the International Convention
for the Prevention of Pollution from Ships (MARPOL Convention) was adopted in 1997, to address air pollution from shipping. The regulations for the
Prevention of Air Pollution from Ships (Annex VI) seek to control airborne
emissions from ships (sulphur oxides (SOx), nitrogen oxides (NOx), ozone
depleting substances (ODS), volatile organic compounds (VOC) and shipboard incineration) and their contribution to local and global air pollution, human health issues and environmental problems. Annex VI entered into force on 19 May 2005 and a revised Annex VI with significantly strengthened requirements was adopted in October 2008.

These regulations entered into force on 1 July 2010. The regulations to reduce sulphur oxide emissions introduced a global limit for sulphur content of ships’ fuel oil, with tighter restrictions in designated emission control areas. Since 2010, further amendments to Annex VI have been adopted, including amendments to introduce further Emission Control Areas.

Energy efficiency requirements entered into force in 2013.

IMO 2020

Until 31 December 2019, for ships operating outside Emission Control Areas, the limit for sulphur content of ships’ fuel oil is 3.50% m/m (mass by mass). The 0.50% m/m limit will apply on and after 1 January 2020.

The date of January 1, 2020 is set in the regulations adopted in 2008. However, a provision was adopted requiring the IMO to review the availability of low sulfur fuel oil for use by ships to help Member States determine whether the new lower global limit exists. IMO’s Marine Environment Protection Committee (MEPC 70), in October 2016, decided that the 0.50% limit shall apply from 1 January 2020.

What does the new limit mean for ships?

Under the new sulphur limit, ships will have to use fuel oil on board with a sulphur content of no more than 0.50% m/m, against the current limit of 3.50%, which has been in effect since 1 January 2012. The interpretation of “fuel oil used on board” includes use in main and auxiliary engines and boilers. Exemptions are granted in cases involving the safety of the ship, or saving lives at sea, or if a ship or its equipment is damaged. Another exemption allows a ship to experiment with the development of ship emission reduction and control technologies and machine design programs. This requires a special permit from the Flag State of interest.

How can ships meet lower sulfur emission standards?

Ships may have got engines able to burn different fuels that contain low or zero sulfur that meet the requirement of consuming low sulfur compliant fuel. For example, liquefied natural gas or biofuels.

An increasing number of ships are also using gas as a fuel as when ignited it leads to negligible sulphur oxide emissions. This has been recognised in the development by IMO of the International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea services. 3 Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before they are released into the atmosphere. In this case, the equivalent arrangement must be approved by the ship’s Administration (the flag State).

IMO has adopted a MARPOL amendment to prohibit the transport of non-compliant fuel for propulsion or combustion on board a ship unless an exhaust gas cleaning system (“scrubber”) is installed on board.

Controlling the discipline

Implementation is the duty and responsibility of the Administrations (flag States and port / coastal States). Ensuring that the 2020 0.50% m / m sulfur limit is implemented consistently and effectively is a high priority. Ships must be issued an International Air Pollution Prevention (IAPP) Certificate from Flag States.

This certificate includes a section stating that the ship is using fuel oil with sulfur content not exceeding the applicable limit value documented on bunker delivery note or using an approved equivalent regulation. They could also use surveillance, for example air surveillance to assess smoke plumes, and other techniques to identify potential violations.

If the rules are not respected, sanctions are determined by individual parties of MARPOL as flag and port states. IMO does not set sanction penalties, its sanctions are up to each State Party.

What is IMO doing to ensure proper fuel availability?

Implementation is the responsibility of the Member States who are contracting Parties to MARPOL Annex VI. The decision by MEPC in October 2016 to affirm the effective date of 1 January 2020 (more than three years before entry into effect of the 0.50% limit) is intended, in part, to provide sufficient time for Member States and industry to prepare for the new requirement, Regulation 18 of MARPOL Annex VI covers both fuel oil availability and quality. As regards the availability of fuel, the regulation requires that each Party “take all reasonable steps to promote the availability of fuels conforming to this Annex and inform the Organization of the availability of compatible fuels at its ports and terminals.

Parties are also required to inform IMO when a ship provides evidence that suitable fuel is not available. IMO Global Integrated Transport Information System (GISIS) urged the Organization to inform the Organization about the availability of compatible fuels at its ports and terminals well before January 1, 2020 through the MARPOL Annex VI module. MARPOL Annex VI Rule 18.1.

Why are ships less harmful than other modes of transport?

Ships emit pollutants and other harmful emissions. But they also transport large quantities of vital goods across the world’s oceans, and trade by sea continues to increase. According to UNCTAD, in 2016, ships traded over 10 billion tons for the first time.

Therefore, ships have always been the most sustainable way to transport goods. Ships are getting more and more energy efficient. IMO regulations on energy efficiency are updating themselves to support the demand for greener and cleaner transport than ever before. A ship that is more energy efficient burns less fuel and causes less air pollution.

In some articles it is cited that only a few large ships emit much more harmful air pollutants than all cars in the world.

However, this worst case scenario does not take into account the amount of cargo carried by the ships and the relative efficiency. It is important to consider the amount of cargo transported and the emissions per tonne of cargo transported per kilometer traveled. Studies have shown that ships are the most energy efficient mode of transport compared to other methods such as aviation, road trucks, and even railways.

On the other hand, it is also important to remember that shipping is responding to the demands of large volumes of world trade. As the world trade volume increases, more ship capacity will be needed.

Ships are the largest engines on the planet, and almost the largest diesel engines in the world are found on cargo ships. These machines have over 100,000 horsepower, compared to a mid-size car around 300 horsepower. Large container ships can transport more than 20,000 containers, and bulk carriers can transport more than 300,000 tons of goods such as iron ore. Very powerful engines are needed to float ships of this size. It is important to calculate how much energy is used to transport every ton of cargo per kilometer. When you look at the relative energy efficiency of different modes of transport, ships are the most energy efficient. Ships therefore burn less fuel, are more energy efficient, less air pollutants, and their emissions are lower.

Can low sulfur fuels cause problems for ship engines?

All Fuel Oil intended for combustion on a ship must meet the required fuel oil quality standards as specified in IMO MARPOL Annex VI (regulation 18.3). For example, fuel oil must not contain any additives or chemical waste that endanger the safety of ships or adversely affect the performance of the engine.

IMO discusses how to identify potential safety issues related to fuel mixes. It is recognized that if these fuels are not properly managed, compatibility and stability issues can occur. If necessary, additional guidance can be developed for crew and ship operators.

The International Organization for Standardization (ISO) standard (ISO 8217) determines and circulates maximum and minimum international standards for fuels used in diesel marine engines and boilers.

A study commissioned by IMO for the “assessment of fuel availability” concluded that the refinery sector has the capacity to supply a sufficient amount of marine fuels with a sulfur content of 0.50% m / m or less and a sulfur content of 0.10 m.

Do small ships also have to comply with the sulfur limit?

Yes they do, MARPOL rules apply to all ships. Vessels of 400 gross tons and over sailing to ports or offshore terminals under the jurisdiction of other countries must have an International Air Pollution Prevention Certificate issued by the ship’s Flag State. However, ships of all sizes must use fuel oil that meets the 0.50% limit as of January 1, 2020.

Some smaller ships may be using a suitable marine distillate for their engines. Like the small vessels operating in predetermined emission control areas may use fuel oil that meets the 0.10% limit in these emission control areas for instance.

IMO 2020 Update: The Impact We See So Far (Agust 2020)

Now that the deadline for January 1 has come and gone, we wanted to share an update on the real-world implications of IMO’s mandate.

With steamship lines beginning to purchase low-sulfur fuel in early November 2019, there was definitely an increase in fuel surcharges. There were many speculative fears that fuel wages would double or triple, but that is currently not the case.

In the first quarter of the year, the dry cargo market suffered from the financial burden brought by IMO 2020. Since the charter rates are inversely proportional to the maximum 0.5% sulfur marine fuel prices in important bunkering ports, the increased fuel costs after IMO 2020 were not reflected in the freight rates. Charter rates for ships (T / C time charter $ / day) rose in direct proportion to VLSFO prices and / but freight gains fell.

In fact, there were no stable inrease in T / C ratios as well, temporary fluctuations were experienced. As the fuel price rose, it was seen that shipowners had to lower the daily charter rates of their ships to keep their voyage rates constant. However, over time, freight and T / C rates settle in direct proportion.

The availability of products, that will have to be used as the day-by-day approaches 2020, the refineries’ ability to produce these products, and the rhetoric that these fuels will be too expensive and even that most ships may supposed to consume MGO, all have affected the chemistry of the maritime industry. However, with this pessimistic state of mind, while a stable balance is not expected to be established in a short time, VLSFO prices have started to decrease rapidly. For example, between January 6 and January 17, the price of 0.5 percent sulfur-containing marine fuel (VLSFO) supplied to ships at the port of Singapore fell from $ 740.00 / mt to $ 645 / mt, down 12 percent. Fuel supplying sources have confused the fuel demanders and the maritime market in general with alternative practices. Equilibrium could not be mentioned in such a climate. It was surely unfair forcing the buyers get alarmed and causing them to buy fuel in a panic due to fuel shortage. However, it should not be too strange to experience these negativities, as these are known behaviors and attitudes displayed in transition periods.

This wind blew hard for a while. Some rushed without looking at the price, in order not to have a nightmare of not finding out the fuel, no matter expensive or not, while others expected the prices to drop to reasonable levels as soon as the panic calms down, till the prices settle at a new balance. Because, the managerial risks that the decision mechanisms will face and the scandals they will create within the institution come before losing money in some cases.

It’s time to take a look at the chart below before continuing to discuss the impact of IMO 2020 on the industry!

It is good to take a look at the status of two important international oil criteria since November 2019. Brent crude oil and US West Texas Intermediate (WTI) crude oil turned upside down. Nevertheless, the fearful prediction has not come true, the price of fuel also plumped.  Unfortunately, this has not happened with a cooperation, contribution, ingenuity or victory of any industry.

While the world’s leading oil producers, exporters, importers, consumer countries bullied each other with the geopolitical advantages granted by the world at the end of 2019 and early 2020, while the endless conflicts of various superiority and interests of the muscular world countries continue, a health monster that says I am coming in the last quarter of 2019 It affected the realm. As of March 2020, the coronavirus pandemic Covid-19 has become a nightmare for people breathing. People quickly infected each other, filled hospitals, many people got sick, there were deaths. The remedy was that human interaction should be minimized and social distance rules must be followed. Travels between countries were stopped, businesses were closed, people were advised to stay at their homes. Even mandatory retrictions were
applied. After all these measures, the lockdowns were gradually eased in summer 2020, but Covit-19 is still active.

The returns from the last quarter of 2019 till so far, which we have summarized roughly, have not been surprising. It was known, lived and continues to be experienced. IMO 2020 is the product of an industry awareness. We have brutally betrayed our world. IMO 2020 set out with strict rules to fulfill its duty. And he succeeded in that.

The crashes that came with Covid-19 proved how much harm the emissions caused to all living things in the world. In the process, data on pollution in the atmosphere dropped tremendously. Locks increase again as they are eased.

These deadlocks have dropped global oil demand. The leading oil producers, exporters, and importers of the world, which have fallen into each other, have suddenly entered into a friendly, cooperative, attitude and attitude to increase demand.

So lessons had to be learned!

Covid-19 and demand concerns remain, crude oil and distillate prices are still falling. IMO 2020 has reached its goals, it is no longer a scapegoat.
Source: bunkerist