Cargo Business News - Current Issue


Home The Magazine Current Issue Archives Blog About CBN Subscribe Reprints Conferences Overview Southwest Intermodal Port Productivity Conference Southeast Freight Conference Northwest Intermodal Port Handbooks Overview Pacific Northwest Ports Handbook Golden Gates Ports Handbook Southern California Ports Handbook Buy Handbook Newswire Subscribe Archives Calendar Classifieds Advertise General Information Upload Files

Up Front: Banning bunker fuel could have unintended consequences By Fred McCague - CBN’s Correspondent in British Columbia The United States and Canada have jointly submitted a proposal to the International Maritime Organization in April to declare almost all U.S. and Canadian waters an Emission Control Area out to the 200-mile Exclusive Economic Zone limit on both coasts. Only the Arctic and Western Alaska including the Aleutians are omitted. At the IMO Marine Environmental Protection Committee meeting in London in mid-July after this issue’s press time, the proposal will have been considered and likely accepted. Currently, the comparatively small Baltic and North Seas have this designation. According to the IMO, revised MARPOL Annex VI, which will enter into force on July 1, 2010, will allow for the Emission Control Areas (ECA) to be designated particulate matter and NOx, emissions as well as the currently allowed SOx from ships. When, or if, the joint Canada-U.S. proposal is approved, the designation as an ECA will limit sulfur content in ship fuel to 1 percent in 2010 and 0.1 percent in 2015. Some form of restriction was expected. While emissions from ships have not changed very much, the use on shore of cleaner-burning engines and ultra low sulfur fuel have left the high-sulphur content (worldwide average 2.7 percent) of bunker fuel used in ships stand out as the last major source of sulfur emissions in port cities. Industry sources indicate that unlike most other government ventures, there was little or no consultation on this proposal. The Canadian authorities held some information meetings in January and February with industry representatives, but apparently did not disclose the area to be covered or the effective date expected. The designation will also impose some other limits on engines, which will be phased in. In contrast, the California Air Resources Board held extensive hearings on its suddenly reasonable-seeming requirement to use of lower-sulphur fuel in port and up to 24 miles offshore. The EPA, however, seemed to simply develop the 200-mile limit proposal out of thin air. While there are definite pollution control benefits in ports and near metropolitan areas, there seems minimal benefit in extending these ECA miles offshore, while maps produced by the EPA imagine pollution benefits as far inland as Salt Lake City and El Paso. On the East Coast, the prevailing winds are offshore. Most of the “lives saved” claimed by the EPA with the 200-mile limit on the East Coast will be in Bermuda. The EPA has produced a 329-page technical support document that outlines projected costs, a reasonable sounding $18 per-TEU for a containership serving both Southern California and Seattle, spending 1700 miles inside the ECA. This is based largely on fuel cost increases of $147 per-ton-cost of marine diesel or gas oil instead of IFO 380 residual fuel. The figures seem fairly accurate, and on a 6000-TEU containership would add more than $100,000 to the voyage costs. For Alaska cruiseships, the EPA estimates the cost impact at $7 per passenger per day, roughly $50 per passenger on a seven-day cruise coincidentally equal to Alaska’s $50 passenger tax, which is proving devastating to the trade. What the impact statement does not allow is the unintended consequence - a shipowner would more likely drop either Seattle or Los Angeles in order to reduce the mileage within the ECA to 400 miles, reducing the cost by $80,000. For Prince Rupert or Portland, relying on a longer hauls and smaller volumes, the impact might be devastating. Meanwhile, additional fuel will likely be burned onshore especially in trucks on the I-5 corridor. On the East Coast, with services geared to multiple port calls between Halifax and Charleston, the incentive to drop ports and consolidate services might be intense. Montreal, currently a major transatlantic container port, has a very long haul up the St Lawrence and draft restrictions forcing the use of smaller ships. The impact could be huge, as it would also be in New Orleans and other Gulf ports. The winners likely would include be San Diego, just 20 miles from the start of the ECA at the Mexican border, and Miami and Port Everglades, just a few miles from Bahamian waters that are also outside the ECA. *Editor’s Note: CBN invites an opposing viewpoint to this bunker fuel issue.*	In This Issue Up Front News, Trends & Analysis New Items The Growth Paradox Supply Chain Industries to watch Trade compliance in the workplace Logistics costs dropped in 2008 Overseas trade experts have some tips for you Five things you should know about U.S. trade policy Supply Chain product review Inventory container management Features Gateway at a glance U.S. Northeast Bulk Up Ports & infrastructure Port of Seattle nets new container business Clean trucks at your ports: How to pay for them? Port Product Review Project cargo equipment Commentary Are we thinking inside or outside the box? On the horizon: Wave Energy - A future power source for your port Casualties
Home \| Subscribe \| Our Conferences \| Ports Handbooks \| Advertising Info \| Publishing Services \| About Us Contact \| Calendar \| Past Issues \| Upload Files All contents of this site are copyright 2010 by Northwest Publishing Center and Cargo Business News and may not be reproduced in any way without express written consent of the author.

Up Front: Banning bunker fuel could have unintended consequences