Low-Sulfur Fuel Rule

Starting Jan. 1, 2020, all ships must burn fuel with a content of 0.5 percent sulfur to comply with an International Maritime Organization amendment to the International Convention for the Prevention of Pollution from Ships (MARPOL) known as Regulation 14. 

As a result, a host of challenges face international container shipping by sea. These include concerns over higher costs, international compliance, and the availability of low-sulfur fuel at key international bunkering hubs such as Rotterdam and Singapore. 

Carriers have three paths to compliance, including the use of low-sulfur fuel, installing scrubbers and burning regular bunker fuel, or transitioning to liquefied natural gas to power vessels.

News & Analysis

Heavy lift ship.
14 Nov 2018
Many project shippers have reported a lack of clarity regarding contracts extending into or beyond 2020; these clauses will help set the stage for the IMO 2020 transition.
Maersk Line.
14 Nov 2018
The third-quarter earnings of Maersk and HMM, released Wednesday, send a warning to the container shipping industry of the challenge in recouping higher bunker fuel costs — a challenge that will only increase further when the global low-sulfur fuel rule takes effect.
Container ship bunkering.
12 Nov 2018
Rising volume and revenue by shipping lines — often double-digit increases year over year — has not been accompanied by rates rising to levels that are able to offset the effects of steadily escalating bunker fuel costs.
09 Nov 2018
State-owned Korea Development Bank, the primary lender and shareholder of HMM, is hardening its attitude towards the loss-making carrier.
Yang Ming,
07 Nov 2018
While container shipping fundamentals are improving, 2019 holds major challenges for ocean carriers.
A container ship at sea.
02 Nov 2018
Although the industry is unlikely to see another all-encompassing fiat like IMO 2020, the International Maritime Organization's (IMO’s) ambition is to reduce greenhouse gas (GHG) emissions from international shipping to 50 percent of 2008 levels by the year 2050, and to someday eliminate the fleet's GHG emissions entirely.

Commentary

The year ahead holds major challenges for ocean carriers, and the challenges can be even more acute for midsize carriers such as Yang Ming, requiring even more prescience and agility.