Seago Line – Complying SOx Regulations Costs More

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Seago Line  is Maersk’s intra-Europe subsidiary company.  In a Trade union meet organized by the JOC, Seago Line was represented by its Account Manager Andrea Avani.  He claimed that their targeted 850,000 teu for 2015 would be subject to the new SOX regulations of not more than 0.1% emission in three Special Emission Control Areas of the Channel, North Sea and Baltic Sea and would cost the line around $45 per teu.

Mr Avani  gave an account of the 50 vessels held by the company.

Vessels

Teu

Operation

22

1700-4500         

Mainliner business

28

500-2700         

Feeder trades

Mr. Avani is quoted to have said: “Twenty-seven of our vessels have been impacted by the SECA regulations, and the cost increase on the year before was about $40m – that was the figure we had to collect from our direct customers [shortsea shippers] and business customers [deepsea carriers that buy Seago feeder services].”

Ever since the new regulations were in place, he declared that vessels using the north-west continent & the UK; Scandinavia , Poland, Russia & the Baltics routes were all burning low-sulphur MGO and had ceased using scrubbers. They had also introduced low-sulphur surcharges as per the new legislation. He also mentioned that while, collecting surcharge had been successful in routes where there was uniformity in collection of the LSS while, in yet others, it had been eroded by competitors who had not introduced the LSS.

Other factors listed as hampering trade :

For trades routed through St Petersburg the new economic sanctions  and declining value of the rouble had  masked the direct impact of the new SOx regulations.  He also strongly felt that the regulations had distorted the competition between transport modes.  About being optimistic of the outcome of regulation, he is quoted to have said: “Not really, we need to find a more balanced approach to environmental legislation and it needs to include other modes.”

He was also concerned over lack of uniformity in enforcement of regulations.  The DNVGL report revealed that just 1% of commercial vessels sailing in the SECAs were expected to be inspected for compliance.  Mr Avani questioned the forum “We have complied with the regulations from day one and have since had 7,000 sailings in the SECA areas.  The fact that we haven’t had a single inspection seems to me to be wrong – where is the enforcement of this regulation? Is it really protecting the environment as it is supposed to?”

Source: The Loadstar