The First IMO 2020 Violation Goes to MSC

Let’s take a break from the relentless COVID-19 information, sort of, to speak a couple of matter we thought could be dominating this yr’s worldwide transport information: IMO 2020. Main as much as the implementation of the Worldwide Maritime Group’s carbon emission mandate, there was a lot hypothesis on how properly carriers would do at following the principles round limiting gasoline carbon emissions to 0.5% from 3.5% and the way possible precise enforcement of these guidelines could be.

A couple of week and a half in the past, a narrative began unfolding that provides us our first actual take a look at violation and enforcement.

MSC Ship Illegally Carries Excessive Sulfur Gas

Mediterranean Transport Firm (MSC), the transport line set to overhaul Maersk because the world’s largest service over the course of this yr and subsequent, was the primary main service caught breaking the brand new IMO 2020 guidelines. Mike Wackett reported in a Loadstar article:

The 9,784 teu post-panamax MSC Joanna has been prohibited from working in UAE waters for one yr and its grasp banned indefinitely and dealing with authorized motion from the nation’s Federal Transport Authority (FTA) after allegedly failing to adjust to an order to debunker 700 tons of heavy gasoline oil (HFO) earlier than coming into the Dubai port of Jebel Ali.

Subsequently, Greg Knowler gave extra particulars on MSC’s infringement in a Journal of Commerce (JOC) article:

In line with the UAE’s Federal Transport Authority, the 9,200 TEU MSC Joanna did not debunker 700 tonnes of high-sulfur gasoline earlier than calling Jebel Ali on March 6, regardless of being given repeated warnings. The vessel then known as on the UAE port of Khalifa, with a second name at Jebel Ali on March 13.

Each articles define how carriers got a grace interval between the January 1st, 2020 date when IMO 2020 went into impact and full implementation on March 1st of the rule that ships not fitted with exhaust-gas-cleaning “scrubber” techniques are usually not allowed to hold non-compliant, excessive sulfur fuels.

Seeing one of many very largest carriers on the planet violate this IMO 2020 rule is actually not good optics. It even seems to be worse when Wackett added the next in his Loadstar article:

Transport strains – together with Maersk and Hapag-Lloyd – based the Trident Alliance, an business foyer group geared toward making certain a stage enjoying discipline on the enforcement of the sulphur cap. MSC is just not at the moment a member of the alliance.

It could virtually appear as if MSC, skirting the IMO 2020 regulation whereas not becoming a member of different carriers in lobbying for honest enforcement of stated regulation, is working in a method that might give the huge transport firm a aggressive edge over its competitors that’s in compliance. Nevertheless, that may be a little bit of a leap to judgment.

MSC’s Response to Violation

Instantly upon the breaking of this story, MSC reiterated its dedication to compliance with IMO 2020 and pointed to its massive funding in scrubbers for the corporate’s very sizeable fleet. Certainly, MSC has been on the forefront of pushing ahead using scrubbers for compliance with IMO 2020 by way of the lead as much as the brand new necessities. In an article that Wackett wrote final yr, he stories:

Of the 12 top-ranked carriers, Alphaliner stated, MSC had the “most intensive scrubber programme”, with greater than 200 ships anticipated to have techniques put in.

That does present a substantial funding on MSC’s half in compliance with IMO 2020. It’s additionally to MSC’s credit score that the corporate didn’t bounce to the argument that the MSC Joanna is only one ship in its huge fleet. Such an argument could be like the corporate attempting to trivialize the violation. Moreover, it will be simple for critics to say that it was simply the one ship that received caught.

As a substitute, MSC stated it was investigating how this violation might have occurred. There may be, nevertheless, one thing I discover a bit off-putting in the best way MSC stated it was investigating what occurred with the MSC Joanna. Wackett quotes MSC:

“We’re intently investigating the way it took place that the standard marine gasoline for EGCS [exhaust gas cleaning systems] set up testing was left on board the MSC Joanna in a sealed tank throughout its current UAE port calls, as EGCS set up on this vessel has been delayed a number of months this yr. MSC Joanna has used solely compliant low-Sulphur gasoline since IMO 2020 got here into impact,” [an MSC spokesperson] stated.

Whereas MSC didn’t say one thing lame like this occurred on simply considered one of our many, many ships, it does sound like the corporate’s spokesperson was already making excuses, or at the least pointing at mitigating circumstances, for the violation. The gasoline was in a sealed tank. The gasoline was left onboard, as if to say it had been deliberate to be eliminated. The gasoline was for scrubber testing, which has the implication that it was not to be used within the scrubber-less Joanna. The Joanna was purported to have a scrubber system put in, however that received delayed. So possibly the gasoline was for testing the scrubber the Joanna was purported to have by this level.

It seems that final excuse is the one MSC is now going with. And so they’re including the coronavirus to the excuse. That’s why at the start of this text I stated “sort of” about us taking a break from COVID-19. A Container Administration articles stories:

[MSC] said: “Lots of the shipyards the place EGCS set up has been going down are in areas affected by the present COVID-19 pandemic and this has generated a big backlog of installations for shipowners.

“Particularly, Chinese language shipyards have been closed or partially closed for a major time period following the prolonged Lunar New Yr vacation because the nation grappled with the brand new coronavirus outbreak. This has impacted shipowners’ schedules for retrofitting ships, as has been broadly documented within the media”

The transport line acknowledged that the MSC JOANNA is a type of ships which has topic to an EGCS delay and its set up is at the moment scheduled for June 2020.

Shipyards have really been backed up on retrofitting ships with scrubbers since earlier than COVID-19 hit. Originally of December final yr, Common Cargo posted an article about the world fleet not showing prepared for IMO 2020, together with a piece on ships caught ready for scrubbers.

IMO 2020 was not sprung on the worldwide transport business. Preparation for it, together with set up of scrubbers on ships, actually might and, I consider, ought to have begun sooner than it did. Nevertheless, the precise set up of scrubbers was slower than anticipated, inflicting delays, and the novel coronavirus outbreak in China, which unfold by way of the world, actually added to that.

That being stated, scrubber set up doesn’t create a authentic excuse for the MSC Joanna violating IMO 2020 by carrying excessive sulfur gasoline after warning and months of grace interval to get inside compliance.

The Punishment

Does that imply the punishment is suitable for the crime? Right here’s the punishment in keeping with Insurance coverage Marine Information:

The UAE’s Federal Transport Authority (FTA) suggested on March sixteenth that the MSC Joanna had been banned working in its waters for one yr and had banned the vessel’s captain from engaged on any ships calling at UAE ports. Reuters reported that the UAE stated it had commenced authorized motion in opposition to the grasp for violating the laws.

It ought to be famous that the captain and grasp referred to above is identical particular person. It’s unclear the precise authorized motion the grasp faces. Ought to the captain face career-threatening penalties for this violation? What penalties ought to MSC, as an organization, face, if any? Is no matter punishment put towards the ship, its captain, and/or crew sufficient with out laying particular sanctions on the corporate below which the ship sails sufficient?

I suppose the ship, its captain, and its crew might simply be reassigned to totally different routes, which don’t name on UAE ports. Which may make small consequence, authorized motion in opposition to the ship’s grasp apart, to MSC and the Joanna.

This being the primary huge IMO 2020 violation, how it’s punished units a tone. Does the tone sound correct? Will it make carriers much less prone to violate IMO 2020 sooner or later or make them shrug their shoulders on the penalties. Or is it extra the strain from shippers and the remainder of world to curb air pollution and public picture that’s extra prone to preserve carriers in line than particular punishments for violations?

Tell us what you assume. Do these sanctions seem to be an excessive amount of? Too little?