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Due to the high level of pollutants in the exhaust of the bunker currently used to power some 60,000 ships globally, the International Maritime Organization (IMO) will implement a new regulation regarding these fuels on January 1, 2020. The regulation will require ships to use a fuel that’s better for the environment or undergo physical upgrades to accommodate either of two alternate solutions, effectively reducing sulfur emissions by more than 80 percent. The options: Ships can begin using low-sulfur fuel, they can be outfitted instead with on-board scrubbers that process the exhaust created by current bunker, or they can be converted to allow for the use of liquid natural gas (LNG). Though carriers are expected to charge shippers a surcharge to cover the new costs, the more pressing issue facing shippers is the capacity shortage that is anticipated as ships undergo the installation of scrubbers or other new equipment. Upgrades will require the ships to be out of service for up to 60 days. As ships are drydocked in rotation, capacity issues could last into the 2019 holiday season and into first quarter of 2020 and beyond. https://www.supplychainbrain.com
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