Tramps could face biggest difficulty in complying with IMO 2020, says ICS

Itinerant merchant vessels (tramps) in certain geographic areas could face the biggest problems when it comes to complying with the January 1st 2020 introduction of a 0.50% sulphur cap for all vessels sailing under and IMO-compliant flag or calling at the port of an IMO-compliant country, according to Guy Platten, secretary general of the International Chamber of Shipping (ICS).

He told Reuters that “we believe the (fuel) supplies will inevitably be patchy outside the main bunkering ports, which is of particular concern to the tramp sector”.

Tramps do not have fixed schedules. They go from port to port dropping off and picking up cargoes on an availability basis.

Platten noted that there was a process to buy high sulphur fuel oil if it was impossible to buy 0.50% compliant fuel “but it’s the last, last resort because of all the ongoing things you would have to do afterwards, like cleaning tanks”.

Although stockpiles of low sulphur fuel oil (LSFO) are being built up, these are mainly in major bunkering centres such as Singapore, where there are about seven million tonnes of LSFO and related blendstocks in floating storage, if neighbouring Malaysia is included, with another two million tonnes of fuel fitting the new specifications in landed storage.

Platten observed that less than 10% of the world’s merchant fleet were in dockyards getting scrubbers fitted and that, because of the upfront cost, these were mostly the largest tankers and bulk carriers.

“There will be a real switch over to the new fuels over the next two or three months and it will be interesting to see what problems arise” for ship engines and fuel availability, Platten said.

The tramp sector will make up about 40% of global demand for compliant low sulphur fuels, the ICS said.

Meanwhile it was reported that some tankers that had been scheduled to install scrubbers deferred their visits to the dry docks because there had been an unexpected surge in freight rates.

US sanctions on subsidiaries of vast Chinese shipping fleet Cosco in September caused a surge in global oil shipping rates as traders scrambled to find non-blacklisted vessels to get their oil to market.

The rates for chartering a supertanker from the US Gulf Coast to Singapore hit highs of more than $17m, with the cost of a trip to China hitting $22m. That compared with rates of between $6m and $8m for shipping crude from the US Gulf to China pre-crisis.

That kind of increase was too hard for some shipowners to resist, and appointments to send vessels to dry dock for retrofitting and maintenance work was postponed.

The COSCO affair meant that the cost of moving crude oil was so great that some shipowners switched from carrying refined fuels like gasoline to dirty cargoes that include crude oil, despite the need to clean them later when they went back to carrying clean fuels.