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Need of Container Carriers to Develop Greener Supply Chains to Meet IMO 2020 Cost

29th October 2019
With the cost of compliance to new low-sulphur regulations set to top $10bn in the first year alone, container 'box' lines need to pass through the expense. But if presented correctly, they could use IMO 2020 to offer differentiated services.  AFLOAT adds above the foremast (houseflag) of Cruise & Maritime Voyages Marco Polo bound for Harwich in the UK and also a trio of containerships berthed at the nearby Port of Felixstowe. This is the UK's busiest container port accounting for 48% of Britain's box trade. With the cost of compliance to new low-sulphur regulations set to top $10bn in the first year alone, container 'box' lines need to pass through the expense. But if presented correctly, they could use IMO 2020 to offer differentiated services. AFLOAT adds above the foremast (houseflag) of Cruise & Maritime Voyages Marco Polo bound for Harwich in the UK and also a trio of containerships berthed at the nearby Port of Felixstowe. This is the UK's busiest container port accounting for 48% of Britain's box trade. Photo: Jehan Ashmore

According to a new report, sharing the cost of the International Maritime Organization’s new sulphur rules (see: Irish Sea ferry operator) across the containerised supply chain could mark a new era of greener shipping transportation.

As LloydsLoadingList writes the report by Boston Consulting Group highlighted that compliance requirement from January 2020 is forecast to cost carriers between $25bn and $30bn in additional fuel costs to 2023.

“By selling environmentally friendly services effectively, lines can share these costs with customers as well as promote the ultimate objective of greener supply chains,” Boston Consulting Group said. “The entire ecosystem of value chain participants — including freight forwarders, cargo owners, and consumers — should be willing to bear their fair share of the costs.”

Lines will feel the heaviest impact from higher costs in the first year of IMO 2020 implementation, when it is expected to reach between $10bn and $12bn. Subsequent years would see smaller annual increases due to the shrinking price differential between high- and low-sulphur fuels.

But compliance costs would not be uniform across trade routes and carriers, according to Boston Consulting Group.

For more on this story click here. 

Published in Ports & Shipping
Jehan Ashmore

About The Author

Jehan Ashmore

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Jehan Ashmore is a marine correspondent, researcher and photographer, specialising in Irish ports, shipping and the ferry sector serving the UK and directly to mainland Europe. Jehan also occasionally writes a column, 'Maritime' Dalkey for the (Dalkey Community Council Newsletter) in addition to contributing to UK marine periodicals. 

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