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Global Container Services

New Sulphur Directive (September 2014)

Air pollutant emissions from maritime transport where cargo is transported over long distances, contribute to the air quality problems in the EU. The findings from ‘The Thematic Strategy 2005’ concluded that sulphur emissions from shipping were forecast to exceed those from all land-based sources by 2020.

As from 1st January 2015, the new sulphur emissions directive 2005/33/EC, requires vessels which enter the Baltic Sea, North Sea and English Channel, to reduce the sulphur content of fuels to 1.5%.

Vessel operators and shipping lines are working with a number of possible solutions to comply with this directive, with three main options currently being discussed:

  1. To change to much cleaner and more expensive diesel with low sulphur content (0.1%)
  2. To install purification systems on the ships exhaust pipes.
  3. To invest in new ships which use alternative fuels.

The most likely short term option for all carriers would be to change to the more expensive diesel, and it would be possible to burn this diesel during a vessels journey in the affected areas only. The increased costs would be passed onto the customer as a Low Sulphur Surcharge from the implementation date 1st January. We will  update this article with confirmation of any new arrangements as and when they are officially announced.

Container Haulage (September 2014)

The UK is currently suffering from major shortages in the availability of container haulage, with some carriers and hauliers fully booked for up to two weeks.

The shortages are mainly a result of a new European Union directive which requires all drivers to complete a driver Certificate of Professional Competence (CPC) course. The CPC involves classroom training of 35 hours every five years, which can cost around £3,000, and all drivers were required to complete their first 35 hours prior to the 1st September start date.  Although many hauliers have been well prepared for the legislation changes, which were announced five years ago, others simply were not. 

Some of the older drivers who were close to or beyond retirement age have opted to retire rather than to go through the training.

This is compounded by the fact that we are now in a peak season period for import movements (July was 13% up on the same time last year), and also due to underinvestment in an industry known for its low profit margins.

Unfortunately, most of the carriers will still charge quay rent and demurrage even if they themselves cannot facilitate the delivery within the free time agreement (normal industry standard of 7 days).

Global Containers are pre-booking haulage before the vessels arrive, which is allowing customers to continue to receive containers when required, and without additional cost. However, we do suggest that correct documentation is sent to our office as early as possible to allow us to plan accordingly.

Far East Update (31st March 2014)

Early notifications were received in March that all carriers would increase rates by USD 500 per TEU from 1st April. Although not to this level, increases have now been implemented and all customers have been informed separately.

To combat the long term effect of oversupply in capacity, which is likely to continue for the short term, the carriers are looking at options to use their resources best for the future stability of the market. A new consortium called P3 is getting final approval, which will merge the services of the three largest carriers, Maersk Line, CMA-CGM and MSC. This new network will be the biggest, and will combine the volumes of all three in an attempt to balance the ‘capacity to demand’ more closely.

Currently, there are two other consortia, G6 and CKYHE, between them they combine the services of eleven carriers.

All three networks use vessel sharing agreements, therefore essentially offering just three main services between a total of fourteen companies. This leaves just two other carriers who are operating independently on this trade lane.

Overall the choice of vessels options will be reduced as a consequence, however the full impact of this will not necessarily be known until July / August, when all three networks are expected to be operational.

We are confident that any amalgamation of routes will not directly affect the overall service or transit time for customers.

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