New EU Regulation and IMO 2020 Sulphur Cap Leads to Ferry Increase

For anyone who works in the logistics industry, from fleet managers and freight forwarders, to hauliers and those who make a living doing courier jobs, the IMO (International Maritime Organisation) 2020 sulphur cap is set to have ramifications on costs and feasibility.

Even if you don’t travel outside the UK for your courier jobs, there’s little doubt you’ll be affected indirectly, so it’s important to understand what it’s all about. 

In 2015, the European Union and International Maritime Organisation issued a directive requiring ferry companies to lower the sulphur percentage in fuel from 1%, to 0.1%, with a view to decreasing their carbon footprint and, ultimately, helping to improve air quality in Europe. (The directive affected areas including the English Channel, North Sea and Baltic Sea regions.)

Because ferries had to make significant changes to their fuel systems in order to comply with these new regulations, the ferry companies were left with little choice but to pass the additional costs onto their customers.

This scenario is about to be repeated with the IMO 2020 sulphur cap, which is set to come into effect in January 2020. The global environmental regulation is designed to significantly reduce the sulphur content of fuel used by ships to no more than 0.5%.

As with the previous EU directive in 2015, ferry and ship operators have several alternatives to reach compliance, all of which are costly and the results are not entirely clear. What is clear, however, is that, once again, the costs will necessarily have to be passed on through the supply chain. The options are:

Investing in new engines or ships with dedicated technology.

Switching to a more expensive reduced sulphur fuel.

“Scrubbers” can be fitted to clean the output gasses: these are similar to a catalytic converter in a car. This system cleans the gasses generated by the engines, which enables the ships to continue burning lower grade fuel with far lower sulphur output levels. The scrubbers are retro fitted, but are extremely expensive (a cost of around €5 million per ship) and are not compatible with all vessels.

The final option is to burn cleaner fuel – Marine Gas Oil (MGO) instead of heavy fuel oil (equivalent of super unleaded for cars), which is much more expensive.

For anyone undertaking courier jobs, whether in the UK or beyond, this environmental regulation will have long term and far-reaching effects as shipping companies adjust their business strategies. For freight forwarders, the costs that are passed on for the transportation of goods will be reflected in their own operational practices, which will affect how they buy and manage their road capacity.

Newsletter

Stay ‘in-the-loop’ with the latest news, products and services from Courier Exchange.

Similar stories

Royal Mail Offering Owner Driver Jobs

Hello, sweethearts!

Well, it appears I may have to eat a small serving of my words this week. Why am I embarrassed, you might ask? Well, if you were paying attention you'll know that last week I published a post about how I was glad owner driver jobs were becoming more popular in order to offer some healthy competition to Royal Mail. I was saying I think it's a lesson for the Post Office not to get smug and to actually update their prices.

Read the full article

The new Courier Exchange website offers advanced functionality to courier drivers, freight forwarders and courier companies and we want to shout about it! The new Courier Exchange website offers advanced functionality to courier drivers, freight forwarders and courier companies and we want to shout about it!

Read the full article
Why Freight Exchange Platform Members Should Embrace Dynamic Road Pricing

Do you rely on the road for a living? If so, you probably contribute thousands of pounds each year to their upkeep. But as a tax payer, are you getting value for money? Let me illustrate my point by providing you with an example, albeit a fictional one, but a user case which is based on real world feedback from Courier Exchange members.

Read the full article

Has Christmas come early? Absolutely - if you’re a courier driver who wants to keep business running safely and smoothly through the winter months. A multi-million-pound fleet of gritters will soon be working their magic to help make that happen.

Read the full article

Here to help

Talk to us! On the phone, online or in person… we’re here to help.

Win a YEAR’S FREE membership!

Buy a new membership between 23rd July and 30th July and stand a chance of winning a year FREE!

All you have to do is correctly guess how many gold, bronze and silver medals Team GB will win at this year’s Tokyo Olympics.

Sign up today Terms and conditions
Close popup