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IMO 2020 rule to leave container shipping line with US$1BN fuel bill 

Drewry Shipping Consultants estimates container shipping lines will face an US$11 billion fuel bill next year on account of the switch to low sulphur marine fuel in order to meet the International Maritime Organization’s (IMO) new rule that caps sulphur content to 0.5 per cent from January 1.

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IMO 2020 rule to leave container shipping line with US$1BN fuel bill 
IMO 2020 rule to leave container shipping line with US$1BN fuel bill. Image: Pixabay

Drewry Shipping Consultants estimates container shipping lines will face an US$11 billion fuel bill next year on account of the switch to low sulphur marine fuel in order to meet the International Maritime Organization’s (IMO) new rule that caps sulphur content to 0.5 per cent from January 1.

As a result, carriers will likely pass on the extra fuel costs to shippers. If they fail to foot the bill, the carriers are expected to cut service levels.

The degree of compensation that carriers receive from shippers will dictate the level of service disruption during 2020, according to Drewry’s senior manager of container research, Simon Heaney.

“Our working assumption is that carriers will have more success in recovering that cost than previously, to the point that there will be no major disruption to supply. Most shippers accept that they will have to pay more but they rightly expect any increase to be justified with a credible and trusted mechanism – in other words, the ball is very much in the carriers’ court,” said Mr Heaney. If the ocean liners do fall short in recovering IMO 2020 fuel costs from customers by a significant margin, “there will be much less focus by carriers on service quality and more on cost cutting,” said Mr Heaney.

“In that scenario, carriers will try to protect cash flows by restricting capacity as best they can, through a combination of measures, including further slow-steaming, more blank sailings and off-hiring of chartered vessels.”

There also could be a push by lines to equip ships with scrubbers to avoid the premium pricing on low sulphur fuel. Vessel demolition rates could speed up, too.

“If events follow this path, the supply-demand balance will look very different from our current forecast,” said Mr Heaney.

“The worst-case scenario, when most shipping lines cannot operate close to breakeven and some potentially face bankruptcy, would actually be a far quicker route to rebalancing the market than the current plodding track. “It would take a very brave carrier to want such a turn of events, but for those that could be sure of coming through the other side, after some initial pain the rewards would be far greater.”

Maritime

IMO launches online tool to smooth reporting formalities

An important tool used by software developers to create systems for exchanging the relevant data electronically has been made available by the Organization online and free of charge.

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IMO launches online tool to smooth reporting formalities
IMO launches online tool to smooth reporting formalities. Image: IMO

Streamlining the many administrative procedures necessary when ships enter or leave port is an important element of IMO’s work. And now, an important tool used by software developers to create systems for exchanging the relevant data electronically has been made available by the Organization online and free of charge.

The IMO Compendium is a reference manual containing data sets and the structure and relationships between them, that will enable the IMO Member States to fulfil a mandatory obligation (in place since April 2019) for the reporting formalities for ships, cargo and people on board international shipping to be carried out electronically and in a harmonised way.

Overall this helps make cross-border trade simpler and the logistics chain more efficient, for the more than 10 billion tons of goods which are traded by sea annually across the globe.

IMO is not the only organization dealing with electronic data exchange in maritime transport. But others, notably the World Customs Organization, the United Nations Economic Commission for Europe and the International Standards Organization, have aligned their own data structures with the IMO Compendium to promote harmonization.

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Maritime

Goplapur Port, the new gateway to the east coast of India

Goplapur Port, the new gateway to the east coast of India is located in the mineral rich state of Odisha. 

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Goplapur Port, the new gateway to the east coast of India
Goplapur Port, the new gateway to the east coast of India. Image: Wikimedia/ Government of Odisha

Goplapur Port, the new gateway to the east coast of India is located in the mineral rich state of Odisha.  It lies between Paradip Port in the north and Visakhapatnam Port in the south at almost equi distance from each.  The hinterland of the port are the states of Odisha, Jharkhand & Chhattisgarh, thus providing access to mix of minerals, steel, aluminium, cement and power plants.

The Port was commissioned with limited operational infrastructure in March 2013 and since then it has undergone expansion and presently offers berth length of 800 meters with draught of 13.5 meters and is handling Handymax & Supramax vessels.

The Port is poised to offer a draught of 14.5 meters and would be able to handle geared and gearless Panamax & post Panamax vessels.

The Port has adequate compacted open space for storage of various dry bulk commodities.

Rail infrastructure is also under development to be completed by Dec 2019 for offering 6 sidings in place of present 2 sidings for efficient cargo receipt & evacuation.

The port is connected to the broad-gauge Howrah- Chennai east coast trunk route through a track length of 6 Km and has access to NH-16 (Kolkata – Chennai) through NH 516 of 7 Km length thus offering excellent rail and road connectivity.

The management of the Port is with Shapoorji Pallonji Port Maintenance Limited a group company of Shapoorji Pallonji having acquired major stake since April 2017.

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Maritime

Phase 2 of Shahid Beheshti Port development plan underway

Director General of Sistan and Baluchestan Ports and Maritime: Chabahar Port has the capacity to discharge 12,000 tons of goods and 2,000 tons of staples per day.

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Phase 2 of Shahid Beheshti Port development plan underway
Phase 2 of Shahid Beheshti Port development plan underway. Image: Ports & Maritime Organization

Director General of Sistan and Baluchestan Ports and Maritime: Chabahar Port has the capacity to discharge 12,000 tons of goods and 2,000 tons of staples per day.

Behrouz Aghaee stated that given the high capacity of importing a share of the essential commodities of the country through the largest oceanic port of Iran, several follow-up meeting have been held to arrange the import of staple needed by the eastern provinces through this General Office and Chabahar port.

By holding numerous meetings and visiting of government officials, the Ministry of Commerce instructed two large state-owned companies to transfer 50% of their importehttps://freightcomms.com/files/d goods through the chabahar port; and since October this year we have witnessed the arrival of staple cargo ships at the port.

Aghaee added: Due to the proper infrastructure of unloading and loading and in order to prevent the deposition of goods, more than 70% of the unloaded staples have been discharged from the port. Transportation of staples through Chabahar port will reduce the prices and traffic for ships waiting for disembarkation in other southern ports of the country.

Aghaee added that Phase 2 of the Shahid Beheshti Port Development Plan is underway. Furthermore 30 pieces Strategic equipment including 9 offshore cranes, 13 pieces loading and unloading equipment have been assembled and operationalized in Chabahar port.

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