We have always had to focus on time, costs and emissions.
Stricter environmental legislation such as the International Maritime Organization’s (IMO’s) Marpol Annex VI sets clear rules on the levels of carbon dioxide, sulphur, and nitrogen oxide emissions from the shipping industry.
These rules, which are becoming increasingly tougher, show the industry’s dedication to environmental issues, but they also place a heavy financial burden on shipping companies and supply chains.
“Meeting these strict new emissions targets means adapting our vessels and operations, and investing in new ‘greener’ technology,” explains Kai Kraass, Chief Operating Officer of Ocean Services for Wallenius Wilhelmsen Logistics (WWL). “Shipping companies that are not prepared to comply will pay a heavy price, and unfortunately so will their customers and consumers.”
For over a decade WWL has had a proactive environmental policy in place which has positioned the company well for this tough new regulatory framework. Initiatives such as low-sulphur content in fuel and ballast water control systems have made WWL an environmental forerunner in its industry. New technology like weather routing also plays a role in reducing emissions.
“It provides our captains with information and offers proactive route options so they can avoid bad weather in time and use the wind to their advantage, meaning quicker and safer journeys,” says Kraass.
“WWL has been acquiring knowledge and making investments over the years that give us a real leg up,” he adds.
Yet he remains realistic. “New regulations will, unfortunately, increase operational costs in our industry and make ocean transportation more expensive. However, we are well positioned with modern ships, our factory-to-dealer concept and environmental commitment and will keep looking for new solutions to reduce the overall impact.”
As proof, Kraass points to WWL’s Supply Chain Optimisation Model, a tool his team has already used successfully to identify both CO2 and cost reductions for a global automaker’s outbound supply chain. His team is also currently developing “green trade lanes,” an innovative approach that would combine environmental benefits and significant cost reductions.
“We have always had to focus on time, costs and emissions,” he emphasises. “People often think that costs and emissions are incompatible but in fact you can bring both down together if you allow more time.”
Kraass compares the current pressure on shipping companies to reduce their emissions to similar pressures which vehicle manufacturers have faced. “We have to get the best out of three parameters - cost, speed and emissions – focusing more heavily on a reduced carbon footprint,” he says.
“At the end of the day, he adds, “We are all sitting in the same boat here and we are dependent on each other. Together with our customers we have a great opportunity to design and implement a low emissions and flexible supply chain.”
Updates to Marpol Annex VI:
- August 1, 2012: a North American Emission Control Area (ECA) will be formed 200 nautical miles off the US and Canadian coastline, making this the third ECA after the North Sea and Baltic Sea.
- Jan 1, 2013: A global mechanism to place a cost on CO2 emissions is expected to be in place. Current scenarios suggest that companies may have to pay between USD 30 and USD 135 per tonne of fuel used.
- Jan 1, 2015: Vessels operating in the ECAs must reduce sulphur content in their fuel to 0.1%, increasing the cost of fuel used in ECAs by USD 150-200 per tonne.