IMO 2020: shipping’s ‘Y2k’ moment

1 January 2020 could be “almost like Y2k”, said Joe Hughes, chairman and CEO of the American Club, after delivering his annual market presentation in London last week (3 December).

He suggested to ShipInsight that, in the same way that there were concerns about how computer software would react to the arrival of the millennium, “we aren’t going to know until the date has come and gone” what impact the requirement to use compliant fuel will have on shipowners and their P&I clubs.

Unlike the potential Y2k problems, however – which were expected to be obvious on the stroke of midnight on 31 December 1999 – any difficulties from using the new fuels will take longer to confirm: “we’ll know within the first three-six months whether there’s been any knock-on effect so far as the P&I market is concerned,” Mr Hughes said.

He described the club’s preparations for the change as “prophylactic” which, in a medical context refers to action taken to prevent disease. “We are taking preventative measures to ensure that our members are best prepared to take account of what might happen both operationally and in legal terms,” he said, but added that the club had not made any specific provisions in case of claims related to the fuel change. “We are agnostic” about the outcome, he said.

P&I claims resulting from incidents related to fuel problems – such as a large general average or a stranding, he suggested – would be investigated like any other claim, he told ShipInsight. “We’ll take each on its own merits [but] we won’t be acting as the ‘super policeman’, [applying] a higher standard than we [normally] apply to owners, whom we expect to act as prudent uninsureds in all cases.”

Nonetheless, during his presentation he had included IMO 2020 in a list of “statutory pressures [that] persist”, saying that the board of the International Group of P&I clubs – of which the American Club is a member – is spending increasing amounts of time on addressing them, “rather than [on] what might be regarded as traditional P&I.”

As part of the club’s ‘prophylactic’ approach, in September it published an 84-page ‘compendium’ of information about bunkering that can be downloaded from the club’s website along with a number of other fuel-related documents.

That publication says that the global sulphur cap “has brought a level of uncertainty to the marine industry” that “will continue in the months following the implementation date.” In a summary of a chapter titled ‘Fuel oil challenges: 2020 and beyond’ it advises that “many of these challenges cannot be sufficiently addressed until … there are more bunker fuel streams” available to supply compliant fuel.

Meanwhile, the publication advises that enough samples should be taken when stemming bunkers to comply with the MARPOL Convention and “to perform any additional testing as may be necessary that go beyond the tests of the standard ISO 8217 specifications.” Then, if a consignment of bunker fuel causes problems, it will be possible to identify any contaminants.

“The need for proper testing of bunkers being loaded and onboard the ship cannot be overstated,” the notes stress.

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