The installation of scrubbers and the economics of using this technology was one of the hottest topics in the shipping industry in the lead up to the January 1, 2020 introduction of the International Maritime Organization’s (IMO) global sulfur regulations.
The containership industry as of mid-year became the most scrubber outfitted sector of the commercial cargo shipping industry surpassing the crude oil tanker fleet according to a new report from Bimco, a maritime association for shipowners, charterers, shipbrokers, and agents. According to Bimco’s data, containerships with a collective cargo capacity of 5.3 million TEU are now fitted with an exhaust gas cleaning system (scrubber) to remove sulfur oxides (SOx) from the exhaust gasses.
Bimco breaks down the numbers for installed scrubbers by sector, including pending installations and newbuilds to be fitted with scrubbers, as nearly 32 percent of containerships representing 8 million TEU capacity; nearly 31 percent of crude oil tankers representing 141 million DWT; and a quarter of dry bulk capacity, representing 226 million DWT.
“In order to cut the sulfur oxides emission, shipowners who can afford to buy a scrubber have done so to a substantial extent, with investments predominantly directed towards high consumption ship types,” says Peter Sand, BIMCO’s Chief Shipping Analyst.
Bimco reports that 13 percent of the main cargo carrying ship types, approximately 2,600 of the roughly 20,000 commercial cargo-carrying ships, are currently fitted with scrubbers. The bigger ships, the VLCCs, Capesizes, and Ultra-large containerships, which by nature consumer more fuel, according to Bimco have been the ones to adopt scrubber technology versus the smaller Aframax, Handymax/Handysize and feeders classes of commercial cargo ships.
Approximately 30 percent of VLCCs and Capesize vessels, measured by DWT, are currently fitted with scrubbers, and by the end of 2020, BIMCO estimates that it will have risen an additional five percent. For the post-Panamax (15,000+ TEU) class the share currently exceeds 40 percent and is likely to reach half the class by the end of the year.
Despite recent reports questioning if shipowners would continue to install scrubbers aboard their ships, Bimco reports the trend is continuing both with half of all containership new builds, representing 1.2 million TEU, will be delivered with scrubbers. In addition, they report that there are 429 pending retrofits representing 1.5 million TEU. Most of the retrofits are coming in the dry bulk and containership sectors whereas the use of scrubbers for crude oil tankers is mostly coming from the newbuilds.
“Choosing the scrubber option to comply with the sulfur regulation was heavily debated as 1 January 2020 approached. But even with the low bunker fuel price spread between high and very-low sulfur fuels in the current market, it is safe to say that the investments are economically sound,” continued Sand.
Contributing to the financial discussion is the narrowing of the price gap between low- and high-sulfur fuels that the markets have experienced.
Choosing to comply with the new sulfur regulation without a scrubber installed requires a ship to run on low-sulfur fuel oil. Since 1 January 2020, the global refinery industry has supplied the shipping sector with mainly low-sulfur fuel oil, with the more expensive distillate, marine gas oil, a distant second. For example, Bimco cites the first six months of 2020, where the share of total Singapore fuel sales amounted to 18 percent for heavy-sulfur fuel oil, 71 percent for low-sulfur fuel oil, and 11 percent for marine gasoil.
“The debate on scrubber economics is all but gone now, as 2020 is in full swing and focus has turned towards COVID-19, and how that impacts the business. What remains are the economic realities and technical obstacles the industry is dealing with daily,” says sand. “Cost savings are essential to all, but despite a considerable share of the fleets now being scrubber-fitted, the largest part of the fleet continues to operate without.”
A massive fire broke out at the Port of Beirut on Thursday, incinerating a warehouse full of tires and oil within the port’s free zone. The same area was heavily damaged in the ammonium nitrate explosion that leveled the central port area and the adjacent waterfront on August 4. According to Lebanon’s civil defense agency, […]
Over the course of the past five days, the Australian Maritime Safety Authority arranged a medical intervention for an injured aboard a freighter in the Indian Ocean. On Saturday evening, the Spliethoff tweendecker Dolfijngracht called for assistance while under way about 1,000 nauical miles off the coast of Western Australia. A crewmember had sustained serious […]
The naval forces of the US and Bahrain recently staged a joint force training exercise which showcased the interoperability between coalition warships operating I the Arabian Gulf. Coalition Task Force Sentinel executed combined exercise Sentinel Shield supporting Sentry and Sentinel patrols in the coalition’s area of operations. The guided-missile destroyer USS John Paul Jones and […]
The U-Freight Group (UFL), with its considerable involvement in eCommerce logistics, says that the latest statistics showing that global e-commerce sales hit $25.6 trillion in 2018 are a further vindication of its decision to enter this sector of the international freight market several years ago. The latest available estimates, up 8% from 2017, were recently […]
DSV Belgium has solid experience in the transport of pharmaceutical products for different customers. With a pharma hub based at Brussels Airport a lot of experience and know-how has been built up over the years. Last weekend, the forwarder handled one hundred million mouth masks, an important milestone for its Belgian organisation that has put […]
The UK government’s new post-Brexit tariff regime will result in both winners and losers. The new regime is set to replace the European Union’s Common External Tariff from the end of the Brexit Transition Period on December 31, 2020. The UK’s commitment to the ongoing Brexit process and ending the UK’s transition from EU membership […]
The National Transportation Safety Board (NTSB) has released a Marine Accident Brief about an accident that occurred on April 15, 2019, involving the towing vessel DeJeanne Maria which struck the end of a submerged dredge pipeline while pushing two spud barges to the Gulf of Mexico. The incident occurred on the Mississippi River in Pass […]
With close to 100 daily cargo flights operated to a destination network spanning more than 65 cities across six continents, Emirates SkyCargo is delivering essential supplies and commodities to people around the world. The air cargo carrier is currently operating 11 Boeing 777 freighter aircraft, each with a capacity to transport about 100 tonnes of […]
Astral Aviation has increased its intra-African network with cargo freighters during the pandemic. While there has been a reduction in capacity to, from, and within Africa, which has been caused by a stoppage of passenger flights and limited frequencies on freighter aircraft, Astral Aviation continues to operate cargo freighters from its Nairobi hub to 13 destinations […]
Best known as a leading passenger airport serving Germany’s most populated federal state North Rhine-Westphalia, Düsseldorf has become transformed into a vital distribution point, during the COVID 19 pandemic, for medical equipment and other life-saving goods, mostly from China. Gerton Hulsman, managing director of cargo operations, reports that the handling teams are working hard to […]
Global commercial aviation charter company Albion Aviation Group is reporting that it is seeing a considerable uptake in its professional cargo broker training courses from the current global pandemic crisis and surge in charter demand. “We have completed a number webinar courses for a whole of host of companies, looking to manage their own cargo […]
Operators can continue to use pilots and other crew members who have unable to comply with certain training, recent experience, testing, and checking requirements due to the COVID-19 outbreak in support of essential operations. Additionally, this Special Federal Aviation Regulation (SFAR) provides regulatory relief to certain persons and pilot schools unable to meet duration and […]
Emirates SkyCargo has expanded its weekly scheduled cargo flight operations to cover 75 destinations across six continents. Through its wider reach, Emirates SkyCargo is able to transport essential commodities and other urgently needed cargo more rapidly across the world, allowing exporters and importers across markets to benefit from direct access to widebody cargo capacity. Some […]
Callan Marine is serving as the prime contractor to the Texas Department of Transportation for a maintenance dredging project located at the Bolivar Ferry Terminal, in Galveston, Texas. Work began in May and is estimated to be complete in late July 2020. The project consists of the removal of 600,000 cubic yards of material and […]
Network Airline Management and TAAG Angola Airlines are pleased to announce the renewal of their long-term freighter aircraft contract by an additional 12 months, sealing an ongoing partnership for the foreseeable future. Operating a regular weekly scheduled service from Liege, Belgium, to the capital of Angola, Luanda, Network Airline Management provides a Boeing 747-400F aircraft […]
Qatar Airways Cargo transported 56 SkyCell containers with vaccines from one of the largest vaccine manufacturers worldwide on its scheduled freighter and belly-hold cargo flights for its customer, CEVA Logistics. The 54-tonne shipment consisting of pneumococcal and varicella vaccines were flown from Brussels to Mumbai via the carrier’s hub in Doha on two separate flights. […]