Question
A medium-sized container carrying line operates with a fleet of six modern 10,000 TEU container vessels, all completed in the last five years, and a
A medium-sized container carrying line operates with a fleet of six modern 10,000 TEU container vessels, all completed in the last five years, and a further six smaller and much older 6,000 TEU vessels built 20 years ago. Like all sea transport operators, this company has to comply with the 0.5% cap on sulphur emissions on its vessels' exhausts, as imposed by the IMO from January 2020. There are basically two ways to comply with this emissions cap, and those are to utilise very low sulphur marine fuel oil (VLSFO) as ships' bunkers (but this compliant fuel is more expensive than higher-sulphur bunker fuel), or to install exhaust-cleaning "scrubber" units on its vessels, at a cost of between $3 million and $5 million per vessel. The installation of exhaust scrubbers allows vessels to continue using the cheaper higher-sulphur marine fuel oils, but vessels must spend time out of service for this installation.This company believes that the reduced sea trade demand associated with the COVID-19 pandemic might provide a possible opportunity to install scrubbers, and it asks you, in your capacity as a marine transport specialist, for some advice as to best way forward. In brief, what would your advice to the carrying line be?Would your recommendations be different in case of the older as opposed to the newer vessels in the company's fleet?
(10 marks)
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