Container lines often take criticism for things that go wrong, so it's only fair to give them credit when they do something right. Often when it comes to the carriers, we hear about inconsistent customer service, inability to coordinate supply and demand of capacity and difficult mergers. The recent carrier decision to adapt a very aggressive position on cutting vessel air emissions when ships are near shore is an example of something they got right. The industry deserves to be saluted as much for doing what's right in this situation as for doing what's smart.
The container lines endorsed through the World Shipping Council a U.S. government proposal calling for the adoption of an aggressive global vessel emissions standard by the International Maritime Organization. In doing so, the lines broke ranks with tanker owners and other segments of the maritime industry that advocate a more conservative approach to emissions. They recognized on a basic level that the environmental debate has changed and unless they get out in front of the issue now their industry could face big problems in the future gaining approval for infrastructure expansion. When clean air was the only factor, a go-slow approach on emissions could be tolerated. Add global warming to the mix and the issue takes on a level of urgency that no one can afford to ignore.
In effect, the liner industry is attempting to accomplish on a global level what the ports of Los Angeles and Long Beach are doing now in Southern California. Such is the intensity of the public backlash against uncontrolled emissions that the two ports had to commit to enormous reductions in truck and other emissions to gain the public's support for continued growth in container volumes.
Without the proposed Clean Air Action Plan, which calls for a reduction in particulate matter by 47 percent over the next five years and nitrogen oxide and sulfur oxide emissions by similar percentages, no pending environmental impact statement will be approved. That means no more pier extensions, railyards, new cranes, terminal expansions or any other type of capacity growth. When the carriers looked around the world, they saw more LA-Long Beach-type situations on the horizon. "For the shipping industry and ports to be permitted to grow to meet the economy's rapidly growing demand for the transportation of goods, we have to address the issue of vessel air pollution. This is true in Europe, North America and in Asia," said Ron Widdows, president of APL Ltd.
The vessel-emissions proposal by the Environmental Protection Agency is akin to the CAAP in its ambition. Currently, the fuel used by oceangoing ships can have a sulfur content of 4.5 percent, according to the World Shipping Council. The EPA proposal calls for the use of more expensive distillate fuel with a sulfur content of 0.1 percent when ships are close to land. This is the standard proposed by the European Union for ships in port beginning in 2010 and by the California Air Resources Board for ships calling at Los Angeles-Long Beach. The EPA proposal also calls for new engine system standards to be adopted globally.
Now the focus turns to getting the proposal passed, which is by no means a certainty. The IMO in the past has approved conventions that fail to create true global standards, such as a recent action on ballast water. Some believe the IMO, which is heavily influenced by bulk carriers and tanker operators as well as by flag states, will fail to adopt a standard aggressive enough to be implemented globally. If that happens, a scenario the carriers are attempting to avoid will be the almost certain result - a multitude of inconsistent regulations globally that will only further raise operating costs.
"Only through such an effective international regime can the industry avoid a patchwork of different regulations around the globe addressing this issue, which would needlessly increase costs, produce varying fuel standards, complicate operations, and probably produce litigation," said Chris Koch, president and chief executive of the World Shipping Council, whose members carry 90 percent of container cargoes. Many are looking to IMO Secretary General Efthimios Mitropoulos to provide the leadership that will be needed for the U.N. body to hammer out a real standard.
Getting out ahead on environmental issues is costly, but as the industry has learned in Southern California, it's pay me now, or pay me later.