High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
New proposals at the world’s third largest port may require all shippers that pass through the area to switch to low-sulphur fuels.
In his latest policy address, the Hong Kong Chief Executive confirmed that the government will consider “new legislation to enforce the requirement of fuel switch at berth”, as well as exploring other means of reducing ship emissions.
He added that a proposal on the new rule would be submitted “in the next legislative session” once the maritime industry had been consulted.
Since September 2012, the Environmental Protection Department of Hong Kong has been providing incentives for ships to switch to low-sulphur fuel and reduce pollution in the territory. More than 560 ships have signed up to the voluntary program.
For ocean-going vessels that switched to fuel with 0.5% sulphur, port fees were reduced by 50% for three years.
However, a recent report highlighted that only 13% of total vessels are registered for the scheme. One of the major reasons cited appears to be the cost of using low-sulphur fuel.
“There is a significant financial commitment to switching fuel,” said Roberto Giannetta of the Hong Kong Liner Shipping Association, speaking to Ship and Bunker, a news and intelligence source for the marine fuel industry.
In a similar statement, a spokeswoman for Evergreen Marine said just one of its container ships was registered because of “cost saving considerations.”
The move by the Hong Kong government is a success for the shipping lines that have been calling for a level playing field for some time.
“Some carriers turn up here, they don’t switch to low-sulphur fuel, and they get a cost advantage,” says Tim Smith, Maersk’s North Asia chief executive officer. “We don’t think that’s right. What we want is the government to regulate.”
Maersk and 17 other operators have been voluntarily using low-sulphur oil for the past two years. Maersk had previously threatened to stop using cleaner fuel in Hong Kong at the end of this year unless the government mandated higher-quality oil for carriers berthing in the city.
This new announcement from the Hong Kong government marks another incentive for shipowners to take advantage of energy efficiency measures and reduce the future costs of compliance.
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