Legislations on Bunker Fuels for a Handymax - Essay Example

Swarna1 Word count: 1262 ID # 5448 Order 194446 d 4th December 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. Introduction A bulk carrier, is a merchant ship used to transport unpackaged bulk cargo such as coal, and cereals. It is also called as bulker. Bulk carriers were developed in the 1950s to carry large quantities of non-packed commodities. Approximately 5,000 bulk carriers trade around the world, providing a crucial service to world commodities transportation (IMO, 2007). 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. Similarly, the shipping sector has undergone several changes in ship dimensions, cargoes carried, and general market trends during the past 25 years as a response to rapid growth of world trade and the shift in maritime markets. At the same time, there have been remarable amendments in regulations of maritime safety especially in transport of bunker fuels in bulk carrier and handymax segement. Hence, the ship manager of Handymax bulk carrier that carries bunker fuels and travels from USA to North Europe faces major problem as there is a difference between maritime regulations of USA and Europe. He has to address the technical problems due to change in legislations and he has to apply management principles for dealing these problems efficiently while manageing the bunker fuels in handymax bulk carriers between North Europe and USA. Technical and legislative problems The ship manager has little flexibility in expansion due to changes maritime regulations regarding the management of bunker fuels are concerned. These regulations are made by international organizations like the International Maritime Organization and the European Union or by individual countries. The International Maritime Organization (IMO) is mainly responsible for the implementation of maritime safety matters internationally which regulates the activities relating to 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. However, he faces more problems due to different regulations adopted in USA and Europe. For example, Environment Protection (Ships Ballast Water) Regulations 2006 restricts the ship manager’s choices while managing the bunker fuels in handymax bulk carriers entering Europe (EPA Victoria, 2007). This legislation introduced by the Victorian Government speicifies ballast water reporting requirements for owners and masters of ships with capacity to carry ballast water. It also declares offences for ship owners and masters for not meeting reporting and/or paying prescribed fees and a cost recovery fee structure for administering the ballast water management system and its implementation by EPA. This increases the cost of marititme transport for ship managers. Similarly, the single hull ships are not allowed in USA, where as they are permitted in Europe. This necessitated the use of double hull ships for international maritime transport. A new MARPOL regulation 13H on the prevention of oil pollution from oil tankers when carrying heavy grade oil (HGO) bans the carriage of HGO in single-hull tankers of 5,000 tons dwt and above after the date of entry into force of the regulation (5 April 2005), and in single-hull oil tankers of 600 tons dwt and above but less than 5,000 tons dwt, not later than the anniversary of their delivery date in 2008. These variations in maritime regulations have created a tough situation for ship managers operating handymax bulk carriers between Europ and USA. Moreover, the recommendations of the Maritime Safety Committee of the IMO 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. In addition, The United Nations, World Trade Organization and the Organization for Economic Co-operation and Development influence the direction of shipping legislations that should be kept in mind by ship managers for better management of bunker fuels in bulk carriers. The ship managers faces another problem due to non uniform nature of laws relating to territorial sea, contiguous zone and other offshore areas, continental shelf and the deep sea. For example, 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 Dioxide Emission Control Areas (SECA) (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, and to press for tighter NO2 standards while transporting bunker fuels. But the problem lies in its different nature of limits for USA and Europe. A very important aspect which needs to be kept in mind by the ship manager pertains to the fuel quality which is delineated in MARPOL 73/78. Besides the sulphur contents, the ship manager have also to ensure that the chemical wastes and other residues do not enter the fuel and cause pollution or corrosion. Further, the ship manager has to ensure that when the ship is nearing SECA, the fuel has to be changed from high Sulphur Heavy fuel oil to low Sulphur Heavy fuel oil. Therefore to facilitate this transition, it may become necessary to have more bunker tankers, after considering the cost elements. It is often the case that there may be a scarcity of Low Sulphur Heavy Fuel Oils ( LSHFO) and therefore, the ship manager may be constrained to change over to the available Low Sulphur Diesel Oils. This may require upgradation of the existing tankers. Hence, the environmental legislations pose severe challenge to ship managers as they impose stringent control over sulphur emissions from bunker fuels. Earlier, higher levels of sulphur emission of 500 ppm was allowed which was drastically reduced to 50 ppm in 2005 according to Directive 98/69/EC (Euro IV). However, the ship manager has a tough job now with the implementation of the specifications of Directive 2003/17/EC (Europa, 2003). This necessitates the ship manager to add fuel additives to reduce sulphur emission as specified by the legislations. Application of management principles The successful management of problems of shipping industry and for dealing International legal aspects while managing the bunker fuels in handymax bulk carriers from USA to North Europe requires implementation of some management principals. The ship managers must be well versed with some important management principles like positive factors for enhancing the productivity of employees and better human resource management (Wayne F. Cascio, 2005). He should also concentrate on other management principles like strategies, policies and global planning, effective organizing and organizational culture and human factors and motivation (Heinz Weihrich and Harold Koontz,1993). Lastly, the ship manager must be well acquainted with the organizational behavior of workers for efficient management of bunker fuels in handymax bulk carrier traveling between USA and North Europe. References EPA Victoria. 2007. Water related legislation. Environment Protection (Ships Ballast Water) Regulations 2006.http://www.epa.vic.gov.au/about_us/legislation/water.asp#regulations_ballast. Europa. 2003. Transport and environment. Directive 2003/17/EC.http://ec.europa.eu/environment/air/transport.htm. 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. Heinz Weihrich and Harold Koontz. 1993. Management: A global perspective. 10th edition. International Edition, Singapore: McGraw-Hill, Inc. IMO (International Maritime Orgnization). 2007. Bulk carrier safety. http://www.imo.org/Safety/mainframe.asp?topic_id=349. John. W. Newstrom and Keith Davis. 2006. Organizational Behavior: Human Behavior at Work. Irwin Professional Publication. ISBN-10: 0072875461. Wayne F. Cascio. 2005. Managing Human Resources: Productivity, Engineers Quality of Work Life, Profits. Irwin Professional Publication. P: 706. ISBN-10: 0072987324. Read More