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Growth in demand for container
ships and the aggressive pursuit of
market share by container ship
operators and liner services is
fuelling the enlargement of the
world fleet in terms of both
aggregate capacity and unit ship
size. As long as the drivers behind
this rapid expansion continue, the
outlook for this dynamic sector
remains positive.
Growth of the container trades has
averaged 9.8% since 1980 and is
forecast to remain at this level for
the foreseeable future. Container
cargo volumes are determined
by the demand for imported
consumer and manufactured
goods, which drives growth in the
container trade and container ship
employment.
Over the short- to medium-term,
foreign manufacturers will
continue to relocate to developing
countries in Asia for cost reasons,
further compounding the effects
of global growth on container
ship demand. This year, the
proportion of total demand for
container shipments on headhaul
(Asia to Europe and Asia
to USA) routes has risen to 67%
from 58% in 2001, clearly
Getting bigger all the time
2 CONTAINER SHIP FOCUS October 2007
Orders for container ship
newbuilds continue to
pour in, but where will
these ships find their
niche?
highlighting Asias pivotal role
on the world market. It is
expected that this ratio will
climb towards the 70% mark
throughout the remainder of the
decade, where it will remain as
long as developing countries in
Asia continue to produce low-
value consumer goods.
Capturing cargoes
Manufactured exports out of
China have provided the
container ship market with
stability in growth over recent
years. These exports have been
boosted by the relocation of
foreign manufacturers to China,
where companies can capitalise
on the competitive advantage
generated by lower labour costs.
This has increased container ship
employment on longer trade
routes.
Most recently, containers have
been used to transport cargoes
that are traditionally synonymous
with general cargo ships. The
proportion of total dry bulk
seaborne trade carried in
containers has grown considerably;
from 17% in 2001 to 24% in 2006.
This proportion is forecast to rise
to around 30% by 2010, at the
expense of general cargo
shippings market share.
The growth in unitised seaborne
dry bulk cargoes is a very
clear demonstration of the
progressive role of container ships
in shipping. Recently, high dry bulk
freight rates have made container
ships the obvious choice when
transporting traditional minor
bulks such as scrap and steel.
Depending on which analyst you
ask, forecasts for annual growth in
container ship demand vary
between 9 and 15%. But even if
growth is at the lower end of the
range, it will be significant. Sizable
growth in demand for container
ships is required to provide
employment for the rapidly
expanding container ship fleet
which has been exhibiting double-
digit annual growth rates for more
than eight years.
Some turbulence ahead
While the robust forces of
globalisation will ensure that
container ship demand growth
will remain firm in the long
term, it is inevitable that there
will be fluctuations along the way.
Container ship demand is
inexorably linked to world gross
domestic product (GDP) growth
by a factor of 3 or 4; GDP
growth of 4% would involve
container ship demand growth
of around 12%. During the
1990s, the ratio of economic
growth to container ship
demand averaged 3.6, whereas
it has now risen to 4.4.
When world economic growth
slumped to around 1.5% in 2001,
demand growth for container
ships fell to 4.1%. As global
growth rebounded to 4% just
three years later, demand growth
for container ships increased intandem. Since then, the past three
years have shown robust demand
growth for container ships on the
back of globalisation.
Any risks or shocks associated with
countries to which world GDP is
most sensitive could also threaten
container ship demand. For
example, an economic slowdown
in the US, Europe, Japan and,
more recently, China would affect
global growth, subsequently
impacting demand growth for
container ships.
41+13.2% compound annualgrowth rate 2002-2010
mGT
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%2002
15.32366071
2003 2004 2005 2006 2007 2008 2009 2010
Figure 1: Proportion of the
existing fleet and orderbook.
by size.
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For further information contact
Gary Morgan, Market Analyst, Lloyds Register
T +44 (0)20 7423 2725
F +44 (0)20 7423 2213
October 2007 CONTAINER SHIP FOCUS 3
Fleet profile
The container ship fleet is currently
keeping pace with overall demand
growth. During the past 12
months, the container ship fleet
has increased by 14%. The fleet
now totals 118 million gross tonnes
(gt), comprising 4,089 ships. This
translates to a cargo carrying
capacity of some 10.2 million teu.The container ship fleet has been
growing at an average of more
than 9.5% since 1980 and is
forecast to maintain this rate to
2010 and beyond.
Currently, the orderbook represents
some 55% of the existing cargo
carrying capacity of the fleet. A
principal reason behind this swell
in orderbook capacity has been
the evolution of the 11,000-plus
teu ultra-large container ship
(ULCS), a popular choice for
newbuilds so far this year. There
are currently 119 ULCSs on the
orderbook; 82% of which were
contracted in the last six months.
Figure 1, which illustrates the
proportion of the existing fleet and
orderbook by size range, shows
those size categories where there is
serious market interest. While the
post-panamax and ULCS rangeshave only a small existing fleet
share, phenomenal development
in both these sectors is expected.
Reflecting confidence in the
markets, the container ship
orderbook for ships of 10,000-plus teu expanded heavily in
the third quarter this year.
Of the 150-plus orders for ships
representing a total capacity of
1.9 million teu currently on
order, some 60% were placed
during July, August and
September. Figure 2 shows Lloyds
Registers impressive performance
in this category, with a 31% share
of the orderbook.
Need for feeders
Figure 1 also reveals possible
shortcomings in the smaller ship
size ranges, particularly the
small feeders. Some 62% of the
container ship fleet by number
is comprised of small and large
feeders, so their contribution is
significant. But feeder tonnage
makes up some 82% of the
20-plus-year-old fleet, which
points to a replacement
requirement in the medium term,
despite the tonnage required to
service the huge increases indemand for container ships.
Feeder tonnage is vital to the
logistics supply chain in which
container ships operate.
The challenge for the container
ship fleet going forward will be
to accomplish equilibrium amid
the rapid pace of development
in the market. This will be
challenging, since the container
ship fleet is a very young one;
45% of the fleet was built less
than five years ago and, when
we consider that a mere 9% of
the fleet is more than 20 years
of age, it becomes clear that
increased scrapping may not be
an immediate source of market
stability. However, pressure may
be felt by companies owning
the slower, smaller and older
tonnage, as their fleets face
obsolescence.
Lloyds Register48 ships of 0.53m teu
31%
Rest of Class109 shipsof 1.33m teu
69%
Figure 2: Lloyds
Registers market
share of 10,000-plus
teu orderbook.
Bigger is better
Container ship operators use a variety of means to increase their
market share. An expansive geographical territory, a frequent and
efficient service and a youthful fleet of large ships are all ways inwhich players differentiate themselves in this competitive market.
There is much at stake; earnings have remained volatile in this
environment, hovering at an average $1,300 per teu for
headhaul and backhaul routes over the past six years, making
economies of scale a vital aspect for operators.
Ship design is influenced by a variety of factors, which range from
the regulatory to the economic. From an economic perspective,
growth in demand for container ships is driving ship capacity
upwards, the only constraint being the global transport
infrastructure. At the same time, the promise of significant profits
has also motivated the evolution of larger container ships.
But size is not everything. The container ship trade model is
a dynamic one, which changes in response to external drivers.
The expansion of the Panama Canal, for example, is an
infrastructural development which will have a significant
bearing on the container ship market going forward. This is
examined in greater detail on page 4.
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How low can you go?
4 CONTAINER SHIP FOCUS October 2007
the development work and will
continue to be used once the
work is complete, ultimately
providing a total of three strings
of locks at each end of the canal.Thus the canal will be able not
only to accept larger ships but
the total annual tonnage passing
through the canal will be
greatly increased.
The expansion plans are,
however, not compatible with
the largest container ships
expected to be in service by 2014;
these 14,000 teu goliaths feature
22 boxes across the breadth of
the ship and a beam of about 56
metres. Such vessels are, instead,
most suited to the Asia-Europe
trades, so it is likely that vessels
ranging in capacity between
12,000 and 13,000 teu will
become the new panamax
(NPX) container ships.
The expansion of the Panama
Canal is likely to lead to a
complete redefinition of container
trades. Lloyds Registers and OSCsextensive research suggests that
US East Coast ports will benefit
substantially from the changes,
and that the expansion forms
a vital element in the likely
reshaping of trade patterns.
With larger ships able to transit
the canal, routes between Asia
and the US East Coast will provide
the most cost-effective means to
move freight in and out of theAmerican Midwest. Central to the
success of the revitalised trades
will be the ability of ships to call
at New York.
Ships entering the most important
of the New York and New Jersey
container terminals will need to
pass under the Bayonne Bridge.
Orders are already
being placed for ships
optimised to the
dimensions of the
Panama Canal
Authoritys Third
Set of Locks project,
but our research reveals
an additional constraint
in the form of the
Bayonne Bridge.
of the Miraflores locks will be
built. Each set of locks will feature
three levels, or chambers, similar
to the configuration of the
existing Gatun locks.
The chambers will allow transit
of vessels with a beam of up to 49
metres (160 feet), an overall length
of up to 366 metres (1,200 feet)
and a draught of up to 15 metres
(50 feet). Each chamber willbe connected to three water
reutilisation basins; 18 in total.
These basins, which are being built
to conserve water, together with
the increased capacity produced
by deepening Gatun Lake and
Gaillard Cut and the raising of
Gatun Lakes maximum operating
level by approximately 0.45 metres
(1.5 feet), will enable many more
additional lockages per day.
The existing two strings of locks,
which can accommodate ships of
up to 32.3 metres (106 feet) beam,
will remain in use throughout
Work has started on the expansion
of the Panama Canal. If all goes
according to plan, the expansion
will cost some $5.25 billion
and the new locks should be
operational by 2014. The project
to add a third set of locks is a
major feat of engineering and will
have a lasting impact on shipping
worldwide.
The container trades are a majordriving force behind the expansion
plans, which will provide greater
throughput and allow an increase
in the maximum vessel size.
Lloyds Register has teamed
up with Ocean Shipping
Consultants Ltd (OSC) to look
at what the expansion means
for container ships.
Whats happening whenTwo sets of locks one at the
Atlantic end of the canal, east of
the Gatun locks, and the other at
the Pacific end to the south-west
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David Tozer
Andrew Penfold
For further information contact
David Tozer, Business Manager Container Ships, Lloyds Register
T +44 (0)20 7423 1562
F +44 (0)20 7423 2213
October 2007 CONTAINER SHIP FOCUS 5
Height restriction
Our study highlights a crucial issue:
ships entering the most important
of the New York and New Jersey
container terminals will need to
pass under the Bayonne Bridge.
With an air draught of 46 metres
(151 feet), this bridge currently
poses a problem for nearly all
post-panamax ships currently in
service and on order. It is
understood that the 75-year-old
bridge will eventually be raised,
but this will be an expensive and
lengthy long-term operation.
This height restriction is,
therefore, a serious issue for
the container trades.
As the drive for improved
economy continues, the latest
generation of large container
ships is being designed with even
higher stacks of containers and
with the ability to carry a greater
proportion of high cube
containers. These factors make
transit under the Bayonne Bridge
even more problematic.
This is a very significant issue that
must not be overlooked, says
OSCs Director, Andrew Penfold.
On the one hand, an NPX ship
delivered today would create
significant employment prospects on a competitive cost basis
in the Asia to Europe trades.
This could drive operators
towards committing to larger
ships, as many have done to
date. But, on the other hand,
operators might very well see
an inability to enter New York as
a significant limiting factor.
David Tozer, Lloyds Registers
Business Manager for Container
Ships, adds: As the timescale for
the possible raising of the bridge
is uncertain, Lloyds Register is
proposing interim solutions that
will help operators to provide a
competitive service from Asia to
the US East Coast including New
York while the air draught
under the Bayonne Bridge
remains at 46 metres, which can
then be enhanced once the
bridge has been raised.
The solution
To meet the current air draught
restrictions in New York, the NPX
container ship will need a
reduced height. This may be
achieved by the fitting of folding
masts, a lower funnel and by
carrying fewer tiers of containers
on deck, possibly as few as five
tiers. Designs are likely to emerge
with a one third forward or
even fully forward bridge
arrangement to maximise the
ships container capacity.
In the future, when the Bayonne
Bridge is raised, it will be a
relatively straightforward matter
to convert these ships to carry
seven or eight tiers on deck by
increasing superstructure and
funnel heights, providing this
enhancement is designed-in at
the time of build.
Container ship orders are forging
ahead, but it is important to
understand the environment in
which these ships will operate. We
can help ship owners and builders
understand how best to address
some of the technical challenges
facing container ship design today.
To meet the current air draught
restrictions in New York, the
NPX container ship will need
a reduced height.
Bigger is better
The growth of the
container trades is
remarkable, not only in
terms of the total capacity
of the container ship fleet
which has now surged
past 10m teu, but also in
terms of ship size. The
largest container ships in
service today have
capacities greater than
10,000 teu, which seemed
unthinkable just a few
years ago.
In 1999 Lloyds Register,
then classing the largest
container ships in the
world, embarked on a
comprehensive study to
examine the future
prospects for ultra-largecontainer ships (ULCS) and
predicted the introduction
into service of ships like
the Emma Mrsk, the
largest container ship in
service today by a
significant margin.
Today Lloyds Register is
investigating, again with
OSC, the implications of
the next major influenceon the container trades:
the development of the
Panama Canal to
accommodate container
ships almost as large as
the ULCS.
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Going for green
6 CONTAINER SHIP FOCUS October 2007
But appearances are not
enough; a better-informed public
knows to look beyond whatis presented to them at the
shopfront. They want reassurance
that the consumables they are
presented with have arrived
with due care; an expectation
that extends far down the
supply chain.
The resulting pressure from US
retailers keen to demonstrate
green credentials under
accreditation schemes such
as ISO 19000 is encouraging
container ship owners to look
at the impact of their own
operations on the environment.
At the same time, green issues
are falling increasingly under
the regulatory spotlight (see
page 8) and it is likely that
existing regulations and
recommendations requiring
the construction, maintenance
and operation of ships to take
place with minimum impacton the environment will be
more stringently enforced in
the future.
COSCO cares
China Ocean Shipping (Group)
Company (COSCO) is among a
core of container ship owners who
recognise the need to build shipsthat demonstrate green credentials.
The latest and largest addition to
the COSCO fleet, the 10,050 teu
COSCO Asia, has been classed
by Lloyds Register and holds
our Environmental Protection
(EP) notation. She is the first of
four sister ships to be built at
Hyundai Heavy Industries (HHI)
yard in Ulsan, South Korea. The
remaining three are due fordelivery by mid-2008.
The stringent environmental
standards COSCO Asia has
been built to reflect COSCOs
commitment to its responsibilities
under the UN Global Compact
(see www.unglobalcompact.org).
The company has fully embraced
this Compact and is applying its
principles throughout its operations.
The Compact asks companies
to commit, within their sphere
of influence, to a set of ten core
values addressing the environment,
human rights, labour standards
and anti-corruption. Regarding
the environment, the Compact
stipulates that businesses should
support a precautionary approach
to environmental challenges;
undertake initiatives to promote
greater environmental
responsibility; and encouragethe development and diffusion
of environmentally friendly
technologies.
COSCO Asia has been built to
stringent environmental standards,
reflecting COSCO's commitment
to its responsibilities under the UN
Global Compact.
There are sound economic reasons
why shipowners should build
environmental awareness into
their container ships.The shelves of North American
and European hypermarkets are
filled with bargains originatingfrom the vast manufacturing
hubs of the Far East. Container
ships, boasting ever-increasing
capacities, have transported them
there in huge quantities and at
low cost.
The average Western consumer,
dazzled by the attractive figures
on the price tag, used not to
think very deeply about the
wider implications of such
apparent good value. However,
the new political and societal
focus on the environment,
driven by worries about climate
change, is encouraging people
to think again.
Shoppers, now expecting moral
as well as financial fulfilment
from their purchases, are
beginning to realise how their
choices can make an ethical
impact. Retailers are duly takingnote and, as part of their efforts,
recognise that it is increasingly
important to be seen to be green.
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For further information contact
Peter Catchpole, Environmental Services Manager,
Lloyds Register EMEA
T +44 (0)20 7423 2011
F +44 (0)20 7423 2026
October 2007 CONTAINER SHIP FOCUS 7
COSCO Asia embodies these
principles. We undertook the
plan approval of the ship, her
equipment and systems, and
surveyed her during construction.Built according to our Rules
on Environmental Protection,
COSCO Asia goes beyond our
basic EP Notation. The three
supplementary characters on
the end of COSCO Asias EP
Notation (B, O, R) indicate that
she incorporates the following
environmentally friendly features:
B: a ballast water management
plan (BWMP) approved byLloyds Register;
O: a 5 parts per million (ppm) oily
water separator; and
R: a refrigerant system in which
the refrigerant gases are
restricted to an ozone
depleting potential (ODP) of
zero and a global warming
potential (GWP), of less than
1,950. GWP is a measure of
how much a greenhouse gas
is estimated to contribute to
global warming, relative to the
mass of carbon dioxide (CO2).
Complying with the 5 ppm
requirements is not an industry
standard and demonstrates
COSCOs great commitment to
the environment, says Lloyds
Register surveyor Haikun Zhu.
Based in our Ulsan office,
Zhu has been involved in the
delivery of the COSCO Asia and
is working on other ships under
construction at HHI.
The environmental standards
that COSCO Asia adopts surpass
international requirements
in three main ways, adds
Hector Sewell, Lloyds Registers
Vice President of Marine
Business Development for China
and Korea. Firstly, COSCO Asias
main engine and generator
comply with the latest
international environmental
protection regulations; secondly,
the separation of oil from oily
water generated by the engine
has been enhanced by using
a new technique on the oily
water separator; and lastly,
she is equipped to fully
implement the ballast water
management plan under the
guidelines of the International
Convention for the Control and
Management of Ships' Ballast
Water and Sediments.
And theres more
Of course, there are further
steps shipowners can take.
Beyond the supplementary
notations B, O and R mentioned
above, ships can gain additional
characters in recognition of
other environmentally friendly
features, as follows:
A denotes that the hull
antifouling system features non-
biocidal paints for example,
silicone-based paints.
P indicates that the ships oil tanks
are protected, as they would be
under MARPOL Regulation I/12A.
N shows that the ships emissions
of nitrous oxide (NOx) do not
exceed a maximum 80% of the
limits specified in MARPOL
Regulation VI/13.
S sets a maximum of 1.5 % m/m
sulphur in fuel oil and a maximum
0.2 % m/m in gas oil.
G demonstrates that the ship has
a grey water treatment plant
installed and that the effluent
conforms to strict limits regarding
its content.
V, which applies to tankers, shows
that vapour emission control
systems have been fitted to
control cargo vapours during
transport and fluid transfer.
Besides the obvious benefits to
the environment, there is a strong
business case for building ships
to EP Notation. Our Rules on
environmental protection have
been developed in anticipation of
upcoming and future legislation
and thus help to future-proofships for compliance going
forward. Furthermore, if
shipowners take a proactive stance
through such green initiatives, they
may also ensure that this future
legislation remains pragmatic
and beneficial to industry.
Environmental inventory
We also offer a Green Passport approval and verification service
for both newbuilds and existing ships (see HorizonsJune 2007,
pages 6-8). The Green Passport, intended to comply with the
International Maritime Organizations (IMO) Guidelines on Ship
Recycling under Resolution A.962 (23), paragraph 5, lists the
materials present in a ships structure, systems and equipment
that may be hazardous to health or the environment. This helps
owners promote better hazard management, increase their
environmental awareness and enhance planning.
HHI president and CEO KS Choi
and Lloyd's Register Chairman
David Moorhouse pictured
with COSCO representatives
Chen Hongsheng, Mao Mei,Wang Wenying, Zhang Fusheng
and Sun Jiakang.
Complying with the
5 ppm requirements
is not an industry
standard and
demonstrates
COSCOs great
commitment to the
environment.
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Emission impossible?
8 CONTAINER SHIP FOCUS October 2007
Reviewing the regulations
IMO has now begun a review of
MARPOL Annex VI, looking to
lower SOx and NOx limits further.
There is a lot at stake in making
newbuilds and existing ships
environmentally friendly. Modern,
10,000-plus teu container ships
now feature even larger diesel
engines of up to 14 cylinders,
which burn more than 200 tonnes
of fuel per day. Any changes
to emissions limits will have
a substantial impact on business.
IMOs independent reviewgroup has identified a number of
options to reduce SOx limits. These
proposals include: retaining a 4.5%
worldwide limit, but lowering the
SOx Emission Control Area (SECA)
limit to 1%; introducing a lower
limit worldwide for an agreed
distance offshore; and lowering
the 4.5% limit to 3% in 2012 and
to 1.5% in 2016. On the last point,
legislation could be used to
encourage the use of emissions
control technology on top of a
requirement for ships to use low-
sulphur distillate fuels in SECAs
and port areas.
There are also proposals for ships
to use distillate fuels with a
maximum sulphur content of 1%
by 2012, which would later be
cut to 0.5% by 2015. This could
come with an option to use
residual fuels with scrubbers to
achieve the same effect.
Meanwhile, the review groups
proposals aim to reduce NOx
limits in stages from 2011,
and again some five years later
for new engines. IMO is also
considering legislation to lower
NOx emissions from slow-speed
engines and NOx limits are also
being considered for ships built
before 2000.
Particulate emissions are also
likely to be increasingly
regulated: IMO is considering
other measures such as the use
of shore-based power in port
and emissions trading schemes,
says Graham Greensmith, Lloyds
Register Lead Specialist, External
Affairs. On a wider scale, the
impact of greenhouse gases
namely carbon dioxide (CO2)
emissions from ships is also
under scrutiny.
Balancing act
Emissions can be lowered
using distillate fuels, shipboardequipment, or an approach that
combines the two.
But while the availability and
quality of low-sulphur bunker
fuel remains uncertain, there
is plenty of research into
developing shipboard technology
to cut exhaust emissions.
Extensive research into exhaust
gas cleaning systems, which
tackle emissions in the waste
stream, is currently underway;
trial results show reduction of
SOx and NOx emissions by some
90% and 15%, respectively, and
MARPOL Annex VI, which was
first adopted by the International
Maritime Organization (IMO) a
decade ago, finally came into force
in May 2005. Since then, a steady
stream of headlines informing us
of increasingly extreme weather
conditions, global warming and
the melting of the polar ice caps,
has captured the worlds attention.
Emissions control is perceived
to be an important factor in
minimising our impact on the
environment. And, at the same
time, there is increasing evidence
of the negative impact of exhaustemissions on our health.
Along with other industry sectors,
shipping must do its bit.
The regulations of MARPOL
Annex VI which deals with the
prevention of air pollution from
ships target ship exhausts and
set limits on sulphur oxide (SOx)
and nitrogen oxide (NOx)
emissions. They also prohibit
deliberate emissions of ozone-
depleting substances.
Modern, 10,000-
plus teu container
ships now feature
even larger diesel
engines of up
to 14 cylinders,
burning more than
200 tonnes of fuel
per day.
Increasing evidence
linking climate change
and poor respiratory
health with exhaust
emissions has necessitated
a review of MARPOL
Annex VI.
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For further information contact
Graham Greensmith, Lead Specialist, External Affairs,
Lloyds Register
T +44 (0) 20 7423 2789
F +44 (0) 20 7423 1564
October 2007 CONTAINER SHIP FOCUS 9
particulates by some 80%. Sulphur
scrubbers also reduce particulates
and other harmful gases.
The use of natural gas as a fuel
may also provide an answer. Its
minimal SOx and NOx output must,
however, be balanced against the
other ways in which natural gas
impacts the environment.
The future regulatory
developments under MARPOL
Annex VI remain, for the time
being, unclear. One thing,
however, is certain: the focus on
the environment is only going
to sharpen and the industry will
be expected to demonstrate its
commitment to tackling the issues.
As part of this, downward pressure
on exhaust emission limits can
therefore be expected to continue.
SOx a punch
As the regulations in MARPOL Annex VI have gone through the
long journey from adoption to implementation, legislation to
tackle emissions has also been introduced on a more local level.
The European Union (EU), Norway and the more environmentally
conscious US states, such as California, are among those targeting
emission from ship exhausts.
The 2005 amendments to MARPOL Annex VI include the establishment
of the North Sea SECA, which overlaps with European Union (EU)
Directive 2005/33/EC and amended Directive 1999/32/EC.
Under the EU Directives, all ships entering SECA zones are limited
to a maximum 1.5% sulphur content in fuels. The North Sea and
English Channel become SECAs under EU legislation this month,
while the Baltic Sea has held SECA status for more than a year.
In addition to this, from January 1, 2010, there will be a 0.1%
sulphur limit on fuels used by inland vessels and seagoing ships
at berth in EU ports. Directive 1999/32/EC goes on to stipulate
that the sulphur content of marine gas oil (ISO 8217 DMA or
DMX) must not exceed 0.2% m/m within territorial waters and,
from January 1, 2008, this limit will be reduced to 0.1% m/m.
More SECAs are likely to be established in the coming years, says
Greensmith. Possible candidates include the Mediterranean, Black
Sea, Hong Kong, Singapore and areas or individual states of the US.
A proactive approach
Ships crews face increased pressures and time constraints when
maintaining manual records to demonstrate environmental
compliance with exhaust emissions and pollution controls.
MARPOL Annex VIs approach of using the bunker delivery note (BDN)
and a bunker manifold sample to demonstrate quality and sulphur
compliance is a well-established process for quality verification of fuel
loaded onto a ship. However, the BDN does not enable an operator to
demonstrate what is actually passing through the fuel system at any
particular point in time, because ships inevitably carry more than onegrade of fuel and these are segregated according to sulphur content.
The MARPOL approach relies on BDNs providing a true indication
of the quality of fuel loaded, and this will depend on how well the
samples have been drawn, as well as on the integrity of the parties
involved when reporting data, says Tim Wilson, Principal Specialist
Engineer and Product Manager of Lloyds Registers fuel oil and
bunker analysis service (FOBAS). Therefore, it allows at best a
calculated guess, based on assumptions, as to the actual quality
and sulphur content of the fuel entering the engine.
FOBAS Onboard
We are currently developing a new real-time fuel and lubricant
quality management system, called FOBAS Onboard with Lab-On-
A-Ship, which will help operators to monitor the sulphur content
of fuel entering ships engines at any point in time. It will also
measure a range of other quality parameters to ensure that the
fuel is of acceptable quality for combustion.
FOBAS Onboard with Lab-On-A-Ship will give operators the ability
to monitor online the level of sulphur entering the engine,
explains Wilson. It will be linked to the ships global positioning
system (GPS), providing a tamper proof system that will be able to
generate data reports linked to the ships position on demand.
Early indications suggest that flag administrations will consider
these SECA compliance reports as equivalent to the handwritten
log of change-over times and low-sulphur quantities that is
currently required by the regulations.
Sulphur is only the first step for FOBAS Onboard Lab-On-A-Ship,
adds Wilson. In the future, we intend to extend the system to
cover a wider range of fuel and lubricant quality parameters, as
well as introducing capability to conduct other environmental
studies, such as evaluating the composition of exhaust gases.
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CONTAINER SHIPFOCUS
For further information on our
marine services relating to the
container ship sector, please
contact David Tozer, Business
Manager Container Ships:
T +44 (0)20 7423 1562
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Container Ship Focus newsletter
is produced by Marine Business
Development and designed by
Pipeline Design.
Care is taken to ensure that
the information in Container
Ship Focus is accurate and up-to-
date. However, Lloyds Register
accepts no responsibility for
inaccuracies in, or changes to
such information.
Managing Editor:
Sarah Norman
Marine Media Manager
Marine Communications
T +44 (0)20 7423 2105
12 C ON TA IN ER SH IP F OC US October 2007
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October 2007
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The danger within
Packed and shipped properly,
with the right documentation,
dangerous goods pose no greater
risk to the safety of life at sea than
any other cargo. But it is when
dangerous goods are mis-declared
or undeclared that incidents can
and will occur.
Shipowners have to deal not only
with the danger these large scale
incidents pose to their crews and
huge costs associated with the
aftermath, but also with the
damage done to their name
and reputation.
Although the International
Maritime Dangerous Goods
(IMDG) Code exists to ensure
the safe carriage of packaged
dangerous goods, non-compliance
is widespread. A study bythe International Maritime
Organization (IMO) suggests that
as many as 30% of all containers
on the worlds oceans carrying
dangerous goods have those
goods mis-declared, are badly
packed, or are otherwise non-
compliant with the provisions
of the IMDG code.
The problem is compounded by
the length of the supply chain for
containerised goods. A container
stuffer located inland may not
think to take into account the
forces placed on a sea container
during a marine voyage. The
custody of and responsibility
for a container may change many
times during its journey along
the supply chain; not all custodians
will be aware of the correct
handling, stowage and response
procedures associated with what
is in that container.
More worryingly, some may
seek to send incorrectly stuffed
containers deliberately. We will
never eradicate malpractice, says
Terry Frith, Technical Manager
of the Chemical Distribution
Institutes Marine Packed Cargo
Scheme (CDI-mpc). But we can
help shipowners to make sure they
are doing everything they can to
ensure operational risks are kept
to a minimum.
Asking for auditsShipowners must therefore be
vigilant in deciding what cargoes
they accept. One way in which
they can perform this due
diligence is by encouraging the
companies they deal with to
demonstrate that they have taken
steps to ensure the containers
they are transporting are safe.
Merely declining to take
dangerous cargoes is not an
option; this can encourage less
scrupulous operators to mis-
declare dangerous goods,
making the problem worse.
CDI-mpcs scheme provides an
independent risk assessment
system for the entire supply chain.
The scheme is sponsored by
chemical companies.
The scheme invites input from
a comprehensive cross section of
the supply chain. Lloyds Register
represents the International
Association of Classification
Societies (IACS) at CDI-mpcs
biannual meetings.
CDI-mpc gathers audit data from
logistics service providers involved
in the distribution supply chain
for packaged chemicals. This
includes shipowners and
operators, tank container
operators, container terminals,
container freight stations, freight
forwarders and agents.
The audit will highlight areas for
improvement, but the companies
have a right to reply, says Frith,
Undeclared dangerous
goods threaten
the safety of life
at sea. Lloyds Register
is working with the
Chemical Distribution
Institute to help
shipowners manage
the risk they pose.
pointing out that subsequent
audits can be used to show if
positive action has been taken.
We dont pass or fail any
organisation. It is up to ship
owners and operators to make
that decision. Questionnaires
tailored to the different parts of
the supply chain are available for
download from the CDI-mpc site,
www.cdi-mpc.org.
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