IMO2020 – What you need to Know

by | Apr 12, 2019

January 1st next year will mark the full implementation of the IMO 2020 regulations that enforces a new 0.5% global sulphur cap on fuel content – reducing the current 3.5% limit significantly.  

The cap is part of the IMO’s response to heightening environmental concerns, contributed in part by harmful emissions from ships.

The International Maritime Organization (IMO) is the United Nations specialised agency with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships.

There are multiple options that shipowners can consider in order to comply with the IMO regulations. Carriers can install exhaust gas cleaning systems on their ships, run on the clean gas LNG as fuel, or buy compliant fuels at higher costs.

The cap is predicted to have some impact on the supply chain industry. For carriers to comply, they will effectively be increasing their operational costs, which are expected to be passed on to importers and exporters through new bunker formulas.

Additionally, the cap will potentially mean the slowing down of some vessels and therefore increased transit times. We have recently witnessed considerable changes to carriers and alliance schedules on the Asia-North Europe route that have already resulted in longer average transit times.

What Should You Do Now?

There is very little that you need to do, or can do now, as the impact of costs and transit times may not be fully apparent until Q4. This is when we would expect to see the majority of steamship lines finalising their implementation process in line with IMO’s requirements.

All that we can do, as socially responsible companies, is try to embrace the changes as a positive step forward for the environment, and be aware that costs and transit times may be affected later in the year.

Supply Chain News from the Supply Chain Academy. The only learning resource centre focused solely on the subject of supply chain, for more information call 01708 259450 or email info@supplychainacademy.org.uk

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