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.
Stay ‘in-the-loop’ with the latest news, products and services from Courier Exchange.
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
Hello, my dears!
I hope you're all well and continuing to enjoy this not very sunny, but rather mild spring we are having. And, of course, I hope you're ready for another romp through the wonderful world of courier driving, courtesy of yours truly!Read the full article
If you’re an owner driver, your van is the tool of your trade. Ensuring your vehicle and contents are kept as secure as possible is extremely important.Read the full article
If you’re a VAT-registered business, the word ‘tax’ might have a bit of a negative connotation, but if you’re a member of Courier Exchange, the platform’s very handy (not to mention user-friendly) ‘Accounting’ feature goes a long way to helping you stay in control.Read the full article
Talk to us! On the phone, online or in person… we’re here to help.