TIM eMagazine Vol.3 Issue 8
OOCL Fleet Moves Forward to Meet
IMO 2020 Regulation
O
ver the years, the industry has seen an increasing amount
of attention given to the environmental impact from the
global supply chain, resulting in regulations on emissions
control and environmental protection becoming more
stringent and widespread across the world.
May it be in the form of introducing or expanding
Emissions Control Areas (ECA) on the regional level,
meeting slow steaming requirements during sensitive
seasons to avoid whale strikes at the local level, or in-
vesting in more efficient ships with the latest environment friendly features to
meet emissions reduction targets, we have all been doing our part to contrib-
ute to the protection of our environment.
OOCL has consistently outperformed many international requirements and
industry standards by proactively taking on a leadership role in implementing
many important initiatives to address global environmental challenges. They
include green investment on our assets, development of green IT solutions,
better Greenhouse Gas management, and participation in global environmen-
tal initiatives, contributing to the success and development of our environ-
mental sustainability profile.
Moving forward, the industry will be stepping into an important chapter in
its history by ensuring all ocean-going vessels in our fleets will be able to meet
the International Maritime Organization’s (IMO) new Sulphur cap regulation by
January 2020. With this new Sulphur cap on marine fuel lowering from 3.5%
to 0.5%, approximately 85% of Sulphur emissions is expected to be reduced
but at a significant cost to the entire industry, estimated at about US$60 billion
each year.
Currently, the industry has been grappling with the challenges associated
to fleet adjustment options, including uncertainties in the availability and ac-
cessibility of the 0.5% Low Sulphur Fuel (LSF) in the market and the premium
that will be charged for the cleaner fuel. As we explore our options and what
would be best for our fleet to ensure compliance by the deadline, OOCL will
begin our transition into the use of LSF for our entire fleet during the second
Credits : oocl.com
half of 2019.
By looking into the expected bunker consumption of our fleet and the
projected price difference from switching to the compliant fuel which may
possibly become increasingly expensive due to tight supply in the market, we
expect the additional cost impact to easily fall well above half a billion dollars.
Under the current industry environment and the level of cost involved to an in-
dustry that is already very cost-sensitive for survival, shippers and the consum-
ers will need to prepare to shoulder this burden.
In preparation for the surge in this operating cost and in consideration of
the continual trend of rising fuel prices in the market, OOCL will be introduc-
ing a bunker recovery approach based on a floating bunker formula that will
better reflect the changes in the industry environment. This approach will take
various factors into account, including the different fuel types being used, fuel
price fluctuations, ship size and capacity, and vessel utilization levels.
In sum, we believe that we are taking the right step towards a greener and
more transparent direction forward in the industry as we all embrace the IMO
2020 Regulation together. As a responsible and committed member of the
international community, OOCL will continue to work closely with our custom-
ers and business partners to strive for further improvements in all aspects of
our businesses for a greener future in the generations to come.
“Orient Overseas Container Line" and “OOCL" are trade names for transporta-
tion provided separately by: Orient Overseas Container Line Limited (“OOCLL")
and OOCL (Europe) Limited respectively and both are wholly-owned subsid-
iaries of Orient Overseas (International) Limited, a public company (0316) listed
on the Hong Kong Stock Exchange. Headquartered in Hong Kong, OOCL is
one of the world's largest integrated international container transportation
and logistics companies, with more than 360 offices in 70 countries. Linking
Asia, Europe, North America, the Mediterranean, the Indian sub-continent, the
Middle East and Australia/New Zealand, the company offers transportation
services to all major east/west trading economies of the world. OOCL is one of
the leading international carriers serving China, providing a full range of logis-
tics and transportation services throughout the country. It is also an industry
leader in the use of information technology and e-commerce to manage the
entire cargo process. www.oocl.com
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