At a conference held in town downtown Oslo today organised by class society DNV GL, delegates were warned of the likely huge volumes of claims that will emanate from next year’s global sulphur cap on bunker fuel.
Rolf Thore Roppestad, CEO of P&I Club, Gard, told the conference that his organisation has already handled more than 100 claims related to the sulphur cap involving yards, owners, bunker suppliers, and machinery equipment manufacturers. Roppestad also revealed his company has seen a number of loss of hire incidents relating to the cap, something he predicted will increase greatly as the cap comes into play.
Tom Paterson, managing director of Canadian owner Fednav, said he felt many owners would not be ready come the January 1 sulphur cap deadline. He also said that those needing to make modifications to their ships in the coming months will struggle to find available yard space with ballast water equipment and scrubber installations hogging space.
“The next six months will be really challenging to get drydock space,” Paterson warned.
In terms of sourcing compliant fuel, Abdulahziz Sabri was well placed to offer advice as president of tanker owner Bahri, a subsidiary of Saudi Aramco.
“Quality is a very big concern for everyone,” Sabri said.
To get best the 0.5% sulphur content deal, owners were advised by the Bahri boss to deal with the oil majors in the main refining hubs. Smaller ports would be more difficult to get the right fuel, the Bahri boss predicted. Most of the 0.5% fuel will be blended and that is where the problems will start, Sabri said.
Andrian Dacy, the head of global transportation at JP Morgan Asset Management, had some stark advice for owners seeking finance going forward. Dacy discussed the growth of Environmental, Social and Governance (ESG) financing, something he said shipping will have to contend with in the coming years.
“Capital, which is the lifeblood of what we do, will ultimately flow in this direction,” Dacy predicted, noting that while in the past there had only been “lip service” paid to ESG financing, this had picked up a huge amount in the past year.
“Increasingly capital will flow in the directions of companies that are doing the right thing,” Dacy said, concluding, “We need to really wake up and see this coming.”