A Ship Manager Faces with Various Legislations on Bunker Fuels for a Handymax Bulk Carrier - Essay Example

Swarna1 Word count: 1387 P.Swarnalatha ID # 5448 Order 194006 d 29th November 2007 Discuss the problems that a ship manager faces with various legislations on ‘bunker fuels’ for a handymax bulk carrier that trades between North Europe and the USA. The changes in economic and political sectors have affected the shipping sector tremendously. There have been the changes in ship size, cargoes carried, performance and general market supply/demand trends during the past 30 years. This is nothing but a direct response to rapid growth of world trade and the shift in maritime markets. Hence the regulations of maritime safety also noticed a change accordingly especially in transport of bunker fuels in bulk carrier and handymax segement. Let us first examine the nature of bulk carriers that carry bunker fuels and then dicuss on the role of ship manager in the new regulaory phase. A bulk carrier, may also be named as bulker is nothing but a merchant ship used to transport unpackaged bulk cargo such as cola, cereals, metals and other ores. Bulker mayu also be defined as any ship that carries dry unpackaged goods (Thomas Lamb, 2003).  Bulkers make up a third of the worlds merchant fleet and range from small coastl trading vessels of under 500 dead weight tons (DWT) to mammoths of 365,000 DWT. Hence the ship manager of Handymax bulk carrier that carries bunker fuels and travels from USA to North Europe faces major problem as far as implementation of these maritime regulations are concerned. As on today, bulkers represent 40% of the world fleet in terms of both tonnage and vessels. Handymax bulk carriers result in heavy traffic and returns. The handymax carrier traveling from USA to North Europe also benefited from a generally favorable market due to traffic into Europe. However, the pollution from bunker fuels has become a major concern for the ship management. Overall, the ship manager has to look in to the following aspects as far as regulations are concerned to ensure the maritime safety as far as bunker fuels are concerned and better returns and to face less problems. Let us first see the problems that may have to be encountered by the ship managers. 1. The changes in demand at international level necessitate the ship managers to respond quickly to the new situation. At the same time, he has little flexibility in expansion due to maritime regulations regarding the management of bunker fuels are concerned. 2. A material decline or prolonged weakness in rates in the shipping. 3. Changes in market trends of sea business. The fast changes in trading patterns significantly impacting overall vessel tonnage requirements of bunker fuels. 4. Changes in rules and regulations applicable to the shipping industry as far as transport of bunker fuels are concerned, including, legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries. 5. The changes in the typical seasonal variations in charter rates. 6. The changes in production or demand for oil and petroleum products, in different regions. 7. Increase in crew wages, insurance, provisions, repairs and maintenance. 8. The changes in general domestic and international political conditions. 9. The changes in the condition of the companys vessels or applicable maintenance or regulatory standards. The impact of the implementation of environmental legislations that imposed stringent control over sulphur emissions from bunker fuels would be tremendous on fuel productivity and hence it affects the ship management. For example, sulphur emission of 500 ppm was permitted in 1996 in accordance with Directive 94/12/EC (Euro I legislation), which was reduced to 350ppm in 2000 (Euro III) and subsequently to 50 ppm in 2005 (Euro IV) under Directive 98/69/EC. In the future, implementation of the specifications of Directive 2003/17/EC (Euro V) (Europa, 2003) will certainly result in an additional reduction in the emission permissible limit. Hence the ship manager must strictly follow the addition of fuel additives to reduce sulphur emission as specified by the legislations. Out of these problems, major issue arises out of change in maritime regulations, which have to be followed strictly by the ship manager while implementing his ship management plan for bunker fuels in handymax bulk carrier traveling from USA to North Europe. There are three main organizations through which governments work to agree the conditions under which maritime activities are carried out. They are: The United Nations (including most importantly the IMO), World Trade Organization and the Organization for Economic Co-operation and Development, all of whose work is complemented by numerous regional groupings. The ship managers should follow the regulations of these organizations in general and IMO in particular for better management of bunker fuels in bulk carriers. The International Maritime Organization (IMO) is at the centre of regulatory activity for the shipping industry. It is mainly responsible for the implementation of maritime safety matters internationally and hence ship manager must be well updated with the change in regulations from time to time. The regulations of IMO mainly stresses on safety at sea, pollution prevention (MARPOL), security (ISPS Code), standards of construction of offshore installations and matters relating to the non-economic issues of maritime transportation of bunker fuels. Hence the ship manager must implement these regulations strictly. He must also be well aware of laws relating to territorial sea, contiguous zone and other offshore areas, continental shelf and the deep sea. The United Nations Convention on the Law of the Sea, 1982 also has to be respected while delivering the duty of ship management in management of bunker fuels in bulk carriers. Air pollutant emissions from ships are covered by Annex VI of the Marine Pollution Convention, MARPOL 73/78, of the International Maritime Organization which declares the provisions on Sulphur Oxide Emission Control Areas (Baltic Sea, North Sea & English Channel) and nitrogen oxide emissions standards for ships engines (Europa, 2007). Hence the ship managers must implement the SO2 Emission Control Areas set out in Annex VI, and to press for tighter NO2 standards while transporting bunker fuels. Similarly, the ship managers must try to implement the promotion of shore-side electricity i.e. providing electricity to ships at berth in ports from the national grid instead of ships producing electricity using their own engines as recommended by IMO (Europa, 2006). This eliminates local air and noise emissions from bunker fuels. The ship manager must be well acquainted with the recent changes in legislations of IMO as far as safety of shipping and protection of the marine environment is concerned. Similarly, the technical recommendations of the Maritime Safety Committee, the highest technical body of the IMO that directly affects maritime safety and security have to be followed. The amendments made to conventions, such as the Safety of Life at Sea Convention (SOLAS), Collision Regulations, Load Lines etc have to be kept in mind while dealing with ship management of bunker fuels in bulk carrier. Any other legislations dealing with bulk Liquids and Gases, carriage of dangerous goods, solid cargoes and containers, fire protection, radio communications and search and rescue, safety of navigation, ship design and equipment, stability and load lines and fishing vessel safety, standards of training and watch keeping and flag state implementation must be well implemented while managing the bunker fuels in bulk carriers by ship managers. Basic management principles like planning (strategies, policies and global planning), organizing (effective organizing and organizational culture), staffing (human resource management and selection), leading (human factors and motivation) and controlling (productivity and operations management) have to be followed by the ship managers for solving these diversified problems and for dealing International legal aspects of shipping industry while managing the bunker fuels in handymax bulk carriers from USA to North Europe (Heinz Weihrich and Harold Koontz,1993). References Europa. 2003.Transport and environment. Directive 2003/17/EC.http://ec.europa.eu/environment/air/transport.htm. Europa. 2006. Pollutant emissions from ships. Recommendations on promotion of shore size electricity for use by ships at berth in EU ports. http://ec.europa.eu/environment/air/transport.htm#3. Europa. 2007. Pollutant emissions from ships. Annex VI of the Marine Pollution Convention, MARPOL 73/78, IMO. http://ec.europa.eu/environment/air/transport.htm#3. Harold Koontz and Heinz Weihrich. 1994. ESSENTIALS OF MANAGEMENT, 5th edition (Chinese Long Form edition) Taiwan: McGraw-Hill International Enterprise Ltd., Taiwan. Heinz Weihrich and Harold Koontz. 1993. Management: A global perspective. 10th edition. International Edition, Singapore: McGraw-Hill, Inc. Lamb, Thomas. 2003. Ship Design and Construction. Jersey City: Society of Naval Architects and Marine Engineers. P: 883. ISBN-10: 0939773406. Read More