The US Federal Maritime Commission (FMC) is strengthening its enforcement with a new Bureau of Enforcement, Investigations, and Compliance (BEIC).

The new Bureau consolidates investigation and prosecution processes as the FMC looks to strengthen enforcement around the Ocean Shipping Reform Act 2022 (OSRA 2022). The Bureau will be headed by an attorney in the Senior Executive Service with regulatory, prosecutorial, and investigatory experience.

“Robust enforcement of the Shipping Act is absolutely key to the effectiveness of the Federal Maritime Commission.  This reorganization has the support of all five Commissioners and creates a structure better suited to meeting the mandate the President and Congress have given this agency to prioritise enforcement,” said FMC Chairman Daniel B. Maffei.

“Specifically, it enhances FMC’s capacity to closely scrutinize the conduct of the ocean carrier companies and marine terminal operators to ensure compliance with the law and fairness for American importers and exporters.”

The recent passage of OSRA 2022 has seen both President and Biden and Congress take a sharp interest in perceived excess profiteering by shipping lines, and a failure to serve US exporters and consumers.

The Bureau is divided into the Office of Enforcement, the Office of Investigations, and the Office of Compliance. The Commission’s Managing Director, Lucille M. Marvin, will also serve as Acting Director until a permanent Director is hired.

Following the signing into law of OSRA 2022 by President Biden on 16 June new demurrage and detention legislation has come into force from the FMC. You can read the key points of this legislation here: New US Demurrage and Detention rules – what you need to know

In early June, the FMC had agreed with Hapag-Lloyd on $2 million fine, following an April decision in a case involving difficulty in returns of containers at the ports of Los Angeles and Long Beach.

Source: https://www.seatrade-maritime.com/regulation/us-federal-maritime-commission-beefs-enforcement


Deck cadet Burak Kinayer, 19, is waiting to hear when he will set sail home to Turkey after five months of being stranded by the war in the Ukraine now a grain export deal has been signed.

As clashes between Russian and Ukrainian forces echoed off the coast of Odesa last weekend, he became concerned, but Kinayer said his nervousness gave way to excitement as the Kaptan Cevdet gets ready to leave, potentially in the coming days.

“The way back does not scare me,” the trainee navigational deck officer told Reuters via videolink from aboard the ship.

“We can say that our excitement and hopes have been through the roof in the recent days,” he said.

Kinayer’s ship is one of dozens preparing to depart from three Black Sea ports blockaded by Russia after its invasion of Ukraine. The opening came after Moscow, Kyiv, Ankara and the United Nations signed a grain-and-fertilizer export deal meant to ease concerns over a growing global food crisis.

Ukraine’s shipments via sea have stalled since February, stoking global prices for grains, cooking oils, fuel and fertilizer. Moscow has denied responsibility for the food crisis, blaming Western sanctions for slowing exports and Ukraine for mining the approaches to its ports.

A coordination centre will be unveiled on Wednesday in Istanbul to oversee ships departing Ukraine and inspect incoming ships for weapons. It will include U.N., Russian, Ukrainian and Turkish delegations.

A Turkish official said on Wednesday all the details had been worked out, including a safe route for ships that will not require the clearing of sea mines, with the first ship likely to depart from Black Sea ports in a few days.

“There is a slight uneasiness but it is good for us that controls will be made and that other ships will be escorting us. This makes us feel safe,” said Kinayer, when asked how he was anticipating a journey with mine sweepers and military escorts.

He and his crew-mates have lived on the ship for the past five months, required to stay on board by the vessel’s operators, given the potential difficulties of returning should they leave.

Kinayer said they were frightened when Russia launched its invasion in February, with people fleeing the nearby city of Odesa and growing concerns about to how to find food.

The nerves returned on Saturday when another Russian strike hit Odesa’s port. Russian Foreign Minister Sergei Lavrov said the strike had been aimed at military infrastructure.

“We were a bit scared by the attack a couple of days ago thinking, ‘What will happen to the deal?’,” he said.

“Our emotions are complicated. As the final days arrive, we feel both excitement and joy,” Kinayer said.

Although his first experience as a deck cadet, learning how to be an officer in charge of a navigational watch, was overshadowed by war, Kiyaner said his love for sea trumped everything.

“It is bad that my first experience turned out to be this way and it will have a scar on me. But since I build my future with the sea, I don’t think about quitting (this profession) because this happened,” he said.

Source:


Abu Dhabi National Oil Company’s logistics and services subsidiary Adnoc L&S has bought Zakher Marine International (ZMI), an Abu Dhabi-based company that owns and operates offshore support vessels, to expand its fleet.

Upon completion of the transaction, which is subject to customary regulatory approvals, Adnoc L&S will add 24 jack-up barges and 38 offshore support vessels from ZMI, boosting its fleet size to more than 300 units, the company said on Tuesday. Financial details of the transaction were not provided.

“With the acquisition of ZMI, Adnoc L&S will broaden its services to include critical support assets for offshore operations, including ZMI’s maiden offshore renewables project in China, and extend its regional footprint, creating new opportunities for expansion with an industry-recognised partner,” Adnoc said in a statement.

ZMI is the world’s largest owner and operator of self-propelled jack-up barges and has operations in the UAE, Saudi Arabia, Qatar and China. The group was established in Abu Dhabi in 1984 and has significantly grown its diverse fleet range supporting the regional and global offshore oil and gas and renewable markets.

The company has long-term contracts with top national and international oil companies and EPC operators and has recently entered the offshore wind farm market in China to diversify its customer base, the statement said.

Adnoc L&S has the largest and most diversified fleet in the Middle East, with more than 200 vessels transporting crude oil, refined products, dry bulk, containerised cargo, liquefied petroleum gas and liquefied natural gas to global markets. Last month, it said it had bought three new LNG vessels to expand its fleet to meet the higher demand globally.

The transaction with ZMI “unlocks new revenue streams, market access, and supports growth opportunities for Adnoc L&S in its core energy and offshore logistics segments”, Adnoc said.

ZMI will continue operating as a stand-alone entity under Adnoc L&S with Ali Hassan Ali as its chief executive, the statement said.

The development comes as Adnoc plans to significantly increase its investment in hydrocarbons and raise its output capacity to five million barrels per day by 2030.

Last year, Adnoc’s board approved plans to spend Dh466 billion ($126.8bn) between 2022 and 2026 on expanding its upstream production capacity and downstream portfolio, as well as its low-carbon fuels business and clean energy ambitions.

Source:
www.thenationalnews.com

S.M.C. is a well-established newbuilding and conversion technical consultant and project manager that has extensive experience working in the Chinese shipbuilding sector. Having supervised a diverse portfolio of vessels from container ships and tankers to gas carriers, DF vessels and passenger ships, the company has now expanded its services to offshore wind projects in China.

Vessels with ”greener” Footprint to support Offshore Wind Activity in China

At the start of 2022, Shanghai Electric Wind Power (Group) Corporation awarded S.M.C. with a plan approval and site supervision contract for two SOVs that will be purpose designed and built for the Chinese offshore wind industry. The vessels are scheduled for delivery in the fourth quarter of 2023 and the first quarter of 2024.

S.M.C. will be working closely with Shanghai Electric – a leading provider of offshore wind turbines in China, Ulstein – a leading designer of SOV units and ZPMC – the builder awarded construction contract. Equipped with hybrid diesel-electric propulsion system that comes with a Battery Energy Storage System installed in addition to very high safety and comfort features, the vessels will improve the efficiency of service operations at Chinese offshore wind farms while reducing their carbon footprint.

In addition to the SOV project, S.M.C. was appointed to carry out plan approval and supervise the construction of a 1,600 tons crane wind turbine installation vessel in China in the beginning of 2022. Set to be jointly classed by the China Classification Society and Bureau Veritas, the self-elevating wind power installation platform is equipped with diesel-electric propulsion system with six diesel generators feeding three azimuth thrusters and two tunnel type bow thrusters. This is in line with efforts by the renewable energy industry to manage its environmental impact. Scheduled for completion by mid 2023, the vessel is capable of installing 20 MW wind turbines at up to 70 m maximum depth of water. The platform, which is independently developed, designed and built in China, is also capable of assembling wind hubs and blades on the main deck.

Global Newbuilding Expertise – deep local Knowledge

Krzysztof Kozdron, Managing Director of S.M.C. says: “These new projects will help us deepen our understanding of the operational and geographical requirements of the Chinese offshore wind market. While this is not our first foray into the market, we look forward to the close technical cooperation with our local and international design and shipyard partners to ensure smooth and successful completion of the projects. We want to use our global experience to support our Chinese clients in meeting the growing demand for renewable energy and a more sustainable future.”

As part of China’s national strategy to develop non-fossil-fuel energy sources, various provincial governments have identified large-scale wind and solar projects as key engines for the development of renewable energy. In 2021, China overtook the UK to become the world’s largest operator of installed offshore wind capacity.

Source: https://www.bs-shipmanagement.com/media-centre/bsm-highlights/schulte-marine-concept-gains-foothold-in-chinese-offshore-wind-market/


Surplus containers are piling up at warehouses as demand wears out, resulting in rising demurrage and detention charges, contributing substantially to the operational costs for shippers. These were a few inferences that were discussed during a recent webinar hosted by Container xChange, world’s leading technology platform and infrastructure provider for container movement.

 

A powerful panel of speakers from Drewry, S&P Global, and Container xChange discussed the impact of charges on shippers worldwide amidst the changing dynamics of demand and supply for containers on a global scale.

Forecasts shared by the experts on the panel indicated a potential further flattening of demand into the peak season. However, it also was emphasised that the impact of the disruptions will take time to wither irrespective of containers moving at a greater or slower pace into the coming holiday season.

George Griffiths – Editor, Global Container Freight, S&P Global Commodity Insights said during the discussion, “The shipping industry is going to see the freight rates stay flat for the rest of the year; however, it could see a little variance but might not fall off the cliff to the extent that we saw it rise when it did in 2020 and 2021.”

Falling Demand behind 2022’s unconventional peak season

Explaining on why the peak season is going to be unconventional, Chantal McRoberts, Head of Advisory, Drewry Supply Chain Advisors said, “There is massive inventory levels that have been building up, if you speak to shippers, they’ve got a lot in their warehouse that they need to move, and demand is falling”.

“I firmly believe if nobody wants to ship anything on a container in the next six months, we still wouldn’t fix the issues that we’ve got in the market at this point. The market is really snarled up, and it’s going to take a lot of effort to fix it,” said Griffiths.

Even if the demand eases towards normal standards and the vessels on blank sailings are used to clear up the disruption, ironing out the market issues at hand are going to be towering.

Emphasising on the uphill task of easing the supply chain disruption, Christian Roeloffs, Co-founder and CEO, Container xChange, added, “We’ve always compared the flow of containers situation to a traffic jam. If there’s an accident and a traffic jam, even if the accident is cleared up it still takes a very, very long time for traffic to flow again… it’s not the case that you just resolve the blockage and then everything flows.”

Pandemic-induced container imbalance adds to soaring D&D charges & freight rates; D&D charges remain at a 12% high despite a fall in 2022

Insights from the annual Demurrage and Detention benchmark report showed that there was a major spike in D&D charges in 2021, the global average increase was 39% for standard containers whereas the charges for 20 distribution centres doubled in 2021.

Looking at the 2022 scenario, the trend in 2022 has been decreasing slightly. For some outlier ports, like Long Beach, Los Angeles, and Shanghai, the charges increased so much that it ended up with the value in 2022 still being higher than pre-pandemic value by 12%.

“The pandemic has thrown a variety of challenges towards the world, when it comes to demand and supply, it has shown some unlikely trends in the market. Ahead of the peak season, and the lifting of Shanghai lockdown, it should have given a bullish impetus to the shipping industry, however, the demand did not materialise.

Congested supply chains added to the mounting charges which in return made it harder to both extract containers from terminals and return empty equipment.

Griffiths said, “In the U.S., for instance, carriers have been really incentivized to keep a tight leash on their equipment due to high freight costs, meet demand, and log jammed into modal networks; within their purview, they’ve taken the cost of the containers on board.

They need to have their equipment back to keep the flow going and be able to reposition the containers. And I think that’s an important nuance in the container market. So that’s why we’re starting to see these costs increase on detention and demurrage, it is because these charges are designed in such a way that it compensates carriers for the use of their containers.”

Further explaining the root of rising D&D charges, McRoberts said, “It’s clear that supply chain disruptions are driving an increase in detention and demurrage charges. If there’s a shortage of drivers, a shortage of physical people and vehicles to get the containers into the ports and out of the ports, it consequently increases the D&D charges.

“These physical blockages had pushed up charges for shippers, and while the situation was easing, a full clearance of backlogs on the discharge front would not come until next year.”

Shippers may get respite from the soaring charges only if congestion is alleviated

Discussing the scenario behind the hefty D&D charges, Griffiths said, “Many, many carriers and operators have introduced strict free time parameters, and as a result these charges for delays have been levied against the shippers. They’ve become a significant cost centre for shippers. Previously, this was a transient cost, people didn’t really look at it. People didn’t pay that much attention to demurrage and detention. But now it has become a cause of concern”

Talking about respite McRoberts said, “There is some latent capacity coming in next year which should help equalise the supply/demand balance, and if we can get the pedal easing off the accelerator of port congestion, then hopefully that will positive ramifications on the cost side.

In the meantime, shippers should be asking questions about what they can and cannot get in the contract bids. You need to make sure you are nailing down free days in your tenders. It is about maximising any opportunity on a hopefully softening cost element. Regulation, however, was likely to have less of an effect than some shippers hope for.”
Source: Container xChange


In darkness, a vessel was proceeding to a busy anchorage under the con of a pilot who had just boarded. The pilot and the Master engaged in small talk as they proceeded and there was also an OOW and a lookout on the bridge. Another vessel underway in the vicinity had recently altered course to port and, unknown to the bridge team or pilot, was now in a potential close quarters situation. Almost 10 minutes passed before the potential close quarters situation was observed by local VTS and the bridge team alerted to the danger by VHF radio.

Only now, with the other vessel just 0.3 nm away, was it plotted. There was initially some confusion as to the speed of the other vessel as the value was changing; but this was be expected in the first minute after plotting as the ARPA target acquisition algorithm needs to refine the calculations. Emergency course alterations were made and the bridge team tried to communicate with the other vessel by VHF radio. As the distance decreased between the two vessels, the bridge team, now under some stress, sounded a long blast on the fog horn. Finally, the other vessel passed astern only 35 metres away.

Collision
Credits: The Nautical Institute
  • A common mistake when pilot boards are for the bridge team to relax; the unstated assumption is that the pilot has everything under control. Not so! The bridge team must continue to do their jobs in full support of the pilot and vice versa.
  • As part of a bridge team, never assume that someone else will see it. It is possible for any member of the bridge team to make an error or miss a cue. YOU may be the only one that identifies a potentially hazardous situation, and for this reason, every bridge team member should be alert.
  • The danger signal is at least five short blasts.

Reference: The Nautical Institute


Ten organisations representing European shippers, freight forwarders, terminal operators and firms in the supply chain have demanded that the European Union immediately review its competition regulation for the container shipping industry.

This is the third time the organisations have called for a review of the regulations, citing continued increases in freight rates, and reductions in capacity, reliability, and quality of service.

The Maritime Executive reported that the organisations were now “disappointed” in the EU’s lack of action – after they twice called for a review in 2021 – compared to other regulators, including the United States.  The Global Shipper Forum is leading the call for the review as one of the ten signatories to the letter.

“There is a striking contrast between the approach of the Commission and the vigour with which the Federal Maritime Commission in the US, and a number of other competition authorities globally, have pursued action against the lines, and the revelations of anticompetitive behaviour which emerged from their investigations,” the group wrote in a letter addressed to Margrethe Vestager, European Commission executive vice-president and Commissioner for Competition.

The group highlighted the latest data recently released by The International Transport Forum, which outlines the seven-fold increase in the freight rate and the reduction of capacity in Europe. They said carriers had increased their profit margins by up to 50%, resulting in a net profit of $186 billion last year, while service issues and costs for shippers had increased.

The EU’s Consortia Block Exemption Regulation, which exempts carriers from certain provisions of the restrictions to promote competition, will expire in less than two years and the organisations now want a review to commence immediately.

The organisations have claimed that “many of the excesses of behaviour” exhibited by shipping lines had stemmed from the “open-ended and highly favourable” terms in the current regulation.

“The regulation does not seem to be able to accommodate major changes in this market over the past few years, including developments in information standardisation and exchange, shipping lines’ acquisition of other supply chain functions, nor how the shipping lines have been able to leverage these to accrue supernormal profits at the expense of the rest of the supply chain.”

Among the ten groups endorsing the letter are the European Association for Forwarding; Transport, Logistics and Customs Services; Federation of European Private Port Companies and Terminals; European Shippers’ Council; Global Shippers’ Forum; International Federation of Freight Forwarders’ Associations; International Association of Movers; International Union for Road-Rail Combined Transport; FIDI Global Alliance; European Barge Union, and European Tugowners’ Association.

Source: https://www.freightnews.co.za/article/eu-shippers-freight-forwarders-call-urgent-review-competition-rule


Low recycling prices for vintage tonnage are expected to hinder any increase in the number of units sold over the next few weeks. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “we are trying to establish from where a concession will appear, the Sellers or the Buyers! On the outside we do not envisage many units to come for recycling for the next month at least and therefore it would need the actual recyclers to increase their rates to tempt any Owner contemplating a recycling sale. However, financial restraints and weakening currencies against the U.S. Dollar continue to put cause for concern amongst the Indian sub-continent recycling community and ensures no over-inflated levels at this current time. There are rumours abound of Letters of Credit unable to be opened for larger LDT tonnage, particularly from Bangladesh, which further creates difficulties when and if a vessel of this ilk comes for sale. We are now witnessing actual sales of tonnage for recycling fall to their lowest levels in a decade and certainly we cannot predict a massive change any time soon during the summer months and heading into the final quarter of 2022”, the shipbroker said.

 

Source: Clarkson Platou (Hellas) ltd

In a separate note this week, Allied Shipbroking added that “the ship recycling market appears in a rather “weird” state as of late. Activity has slowed down significantly, that is partly though explained from seasonality factors, but scrap price levels continue experiencing considerable pressure as well, for a period now.

Source: Allied Shipbroking

In the separate demo destinations and more specifically that of Bangladesh, things are losing momentum, given the currency depreciation and the recent shortage of US Dollar reserves, altering the Letter of Credit availability and as such making the overall local market unable to compete for larger ldt units. In Pakistan, the scene indicated many similarities, facing the same type of difficulties while also at the same time being the least competitive destination for some time now within the Indian Sub-Continent. The Indian market, despite the excess volatility in local steel prices, when compared with the other main Indian Sub-Continent Recyclers, may well have prevailed as the most stable market in the near term (at least)”.

Meanwhile, GMS , the world’s leading cash buyer of ships said in its weekly report that “as the ship recycling sector continues to try and adjust to these new lower realities on price, in addition to adhering to new regulations on L/C limits amidst a dire shortage of U.S. Dollars foreign exchange / reserves in both Pakistan and Bangladesh, the industry is certainly going through an uncertain period. This week, the Bangladeshi government introduced new limits to cap the outgoing volume of U.S. Dollars for ‘essential’ purchases only – raising question marks about higher priced vessels for recycling purchases in the foreseeable future. As such, the government announced that any L/C over USD 5 million has to be approved by the Central State Bank for opening, with the Bangladeshi Taka struggling to such a worrying extent of late.

Source: GMS,Inc

Unfortunately, the currency situation is no better elsewhere as we are witnessing fresh historical lows by the day in all of the major recycling destinations on their respective currencies against the U.S. Dollar, and there have been elevated fears across these locations that international trade may eventually start driving domestic inflation up as the U.S. Dollar continues to strengthen rapidly. Keeping things in check is the fact there are very few new units to work on, now that the tanker chartering market is firming further and this may give the recycling markets, some time to settle and stabilize before fresh units are proposed to Recyclers once again come Q4. While Pakistan has registered a massive drop in local steel plate prices this week, India remains the most stable of the sub-continent markets despite the extreme volatility on Indian plate prices seen on a near daily basis and similar worrying currency depreciation is leaving Alang Recyclers confused and nervous on any firm offers moving forward. On the West End, Turkish plates take another tumble this week as even the currency – like all the major recycling locations – continues its steady slow descent to oblivion”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide


The Russia-Ukraine war and sanctions on Russia’s refined products have created a void in the European market, which is counterbalanced largely by South Asia.

 

The product tanker sector has been gaining from the ongoing geopolitical tensions as a sudden rise in the long-haul trade has boosted freight rates. Drewry expects the shift in trade – from short-haul to long-haul – to become the ‘new normal’ of refined products shipping with Europe sourcing cargoes from South Asia, the Middle East, and North America in 2022-23. Russia’s 2 mbpd of spare capacity and 0.8 mbpd YoY drop in refinery throughput in 2022 as a result of sanctions supports this trend.

Europe was dependent on Russian refined products as the latter contributed 15.9%, aggregating 21.6 million tonnes, to the total European seaborne imports in 2021, with gasoil/diesel comprising 95.4% of the traded volume. On 24 February, the Russia-Ukraine conflict turned into a full-fledged war after which Europe has been reducing its reliance on Russia. Although there were no clear sanctions immediately, CPP exports from the FSU to Europe weakened by about 1.1 million tonnes during March-April, with almost all the deficit created by gasoil/diesel.

Europe counterbalanced Russia’s share by importing around 2.9 million tonnes of CPP from the Middle East the US and Asia. Among these regions, South Asian exports increased by 0.74 million tonnes in March-April, with gasoil/diesel contributing 77.5% to the total share. The Middle East and Southeast Asia followed with a rise in exports by 0.72 million tonnes and 0.58 million tonnes, respectively.

Meanwhile, the gasoil/diesel trade shifted significantly as Russia lost a 15.2% YoY in European gasoil imports during March-April. Although the US has emerged as the prime supplier of gasoil/diesel to Europe after Russia in 2021, South Asia (mainly India) captured the largest share (5.7%) by supplying maximum replacement cargoes to Europe. South Asia was followed by North America (the US) and Southeast Asia (Singapore). The Middle East stands at the fourth position with only a 2.5% increase in share.

As a result, European buyers have shifted from the short-haul trade (between Russia and Europe) to the long-haul trade by sourcing refined products from South Asia, the Middle East, and North America.

We expect this long-haul trade to be the ‘new normal’ for product tanker shipping as Europe intends to shun Russian imports. As supply from North America is unlikely to replace the gasoil/diesel gap created by Russia, we expect South Asia to be the largest contributor, with the Middle East gaining the second largest share in European CPP imports in 2H22.

We expect the product tanker shipping market to enjoy strong rates throughout 2022 on the back of increased tonne-mile demand. Although LR and MR tankers are the true beneficiaries of the rise in rates, smaller tankers will also fetch high rates due to the robust demand.
Source: Drewry


SEEMP Part III represents the International Maritime Organization’s decarbonisation ambitions. The regulation requires ships of at least 5,000 GT and which trade internationally, except passenger ships, to have a verified Ship Energy Efficiency Management Plan onboard before 31 December 2022 to reduce carbon emissions – this must achieve at least a C band. The assessment will take place in the calendar year after the ship-specific SEEMP Part III plan is produced.

 

SEEMP Part III entails measures to improve energy efficiency to attain the required carbon intensity indicator (CII) and the implementation regime, the personnel designated to oversee the process, and contingency measures to overcome impediments. For example, a ship could propose using biofuels as bunkers to reduce emissions, but to prevent engine damage, trials should be conducted beforehand.

Speaking during a recent webinar, LR’s Lead Regulatory Specialist, Abhijit Aul said: “The sooner you act, the better it is. The next few years are going to be crucial going forward.”

Aul reminded the ship owners and operators that with SEEMP Part III, they must devise a concrete plan for reducing carbon emissions. This would be followed by self-evaluation and a constant review of whether the targets are on track and will be met in the prescribed timeline.

Aul said it is inevitable that some ships will not achieve the minimum CII requirements and end up banded D or E. Such ships will have their SEEMP Part III reviewed to include a corrective plan to achieve the required CII. Remedial actions are needed to achieve at least a C rating for the calendar year following the adoption of the corrective plan.

On the various proposals for correction factors, Aul said, “If they didn’t make it this time, it doesn’t mean they have been disregarded. For many of them, it just means that the evidence they provided at the time wasn’t sufficient or there wasn’t sufficient time to consider these correction factors in detail. For a number of these correction factors or voyage adjustments, there is a very strong appetite to push the case to gather more evidence to submit to MEPC. It could take a year, it could take years, but we expect to see a number of discussions.”

LR’s Regional Advisory Services Manager, Douglas Raitt, said that LR can help shipowners and operators by drawing up the three-year implementation plan to achieve the company’s targeted CII, review and update SEEMP Part I and II and provide vessel-specific analysis for improving operational CII.

Besides strategising for reduced carbon emissions, Raitt said that shipowners and operators should also take the resulting future capital and operating expenditure into consideration, with regards to chosen energy efficiency measures, to remain in compliance.

He elaborated: “You have to think, ‘what speed reduction is required to achieve a 5, 10, 15% improvement in the annual efficiency ratio rating?’ It allows the operator to project improvements over a number of years, understand when certain improvements need to be implemented, potentially even budget the implications of capex and opex decisions that need to be made on a variety of ships over the next few years to maintain compliance.
“Once you understand the percentage reductions that you require to maintain compliance with the CII requirements and target, then you can map out what energy efficiency to achieve and more importantly, phase in over the next few years to remain in compliance.”
These steps can be operational in nature, such as speed reductions, frequent hull cleaning, propeller polishing, all the way to the application of energy-efficient technologies which can allow for a certain percentage of improvement.

Shipowners and operators have to reduce the CII by at least 2% annually to remain in compliance. Raitt encourages “robust” discussions with energy saving device manufacturers to meet the target, more so for shipowners and operators who want to achieve an A or B banding.

Raitt said: “To get SEEMP going now, articulate what that strategy might be, get a handle on realistic percentages in improvements. Not all ship types are the same. Not all trading patterns are the same so there’s a level of detail that needs to be understood by owners and operators.”
Source: Lloyd’s Register


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