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Less sulphur to cost €3 billion more?

MANCHESTER, UK: New ocean emission regulations that come into force on January 01, 2015 could add €3 billion to shipping costs and lead to an increase in freight rates.

RhenusRhenus Group UK managing director David Williams says next year's implementation of the International Maritime Organization's Convention for the Prevention of Pollution from Ships (MARPOL), means a price rise is unavoidable: "It's difficult to ignore the likely impact this new law will have on the European freight industry. It could even lead to a rise in road transport emissions due to logistics managers choosing short sea passages and longer road routes to try and reduce shipping charges; directly undermining the logic behind the legislative change."

With the MARPOL Annex VI legislation designed to reduce the sulphur dioxide (SO2) content of bunker fuel from 1.0 to 0.1 percent from January 2015, Williams thinks the maritime industry is faced with four ways of conforming to the new level: Switching to low sulphur fuel; adopting liquid natural gas (LNG); utilizing scrubbers to clean emissions or adopting methanol as an alternative fuel.

Whatever the option, Williams expects shipping costs to increase by as much as 10 to 20 percent as a result of the new regulation: "We are advising our customers to be aware of the unavoidable increase in sea freight costs over the next few months, urging them to discuss their long-term export and import patterns now. This way, plans can be developed to reduce potential price increase exposure wherever possible.

"Rhenus has adopted an up-front policy to this issue, contacting customers proactively, to enable as much pre-planning to take place before these costs become unavoidable, he adds.

With an annual turnover last year of €4.1 billion, the Rhenus Group employs 24,000 people worldwide.

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