Shippers' End Customers Have "Pull Effect" for IMO 2020 Compliance Agenda: Monjasa

Friday June 29, 2018

There will be a high level of compliance with the upcoming IMO 2020 rule because Shippers' customers will demand it too, says Svend Stenberg Mølholt, Group COO at Monjasa.

The global 0.50% sulfur cap on marine fuel comes into force on January 1, 2020, but exactly how the new rules will be enforced among flag states and port controls is still a big unknown. But this is not necessarily a problem either - at least for the major shipping lines, says Mølholt.

"It is very complicated to do any kind of global implementation of rules and regulations like these, but regardless of how the rules are enforced the major shippers of the world such as Walmart, Ikea, and Nike etc, as part of their own CSR initiatives are going to be asking their carriers to be in compliance with the new regulations," he told Ship & Bunker.

"These customers will need to demonstrate their whole supply chain is compliant with global rules and regulations, and carrier compliance will be an important part of that. So, I forsee that this customer demand will also be a driving force behind the IMO2020 compliance agenda, in addition to what IMO and flag states will do. This demand of the end customer for compliance will create the pull effect to make IMO 2020 successful."

There is also a wider picture of compliance needs emerging, and companies who can not demonstrate they are in compliance with global regulations - particularly environmental regulations - will find it increasingly difficult to get financing and other investment.

A consequence of this is that every player in the global supply chain, including bunker suppliers, will increasingly need to be able to demonstrate their compliance.

"For those that do not have an operating model that can accommodate these compliance changes and measures, it will take them a long time to adjust to this and I think that will put them at a commercial disadvantage in the short and medium term," says Mølholt.

"Monjasa as a bunker supplier is already ready to support such compliance needs, so I think it puts us in a fairly favourable position to meet the IMO 2020 demands.

"Ultimately, IMO 2020 is not just something that will impact those that operate vessels or supply bunkers, but also end customers know about this and see it as a big thing. So there's a lot of focus on this from everybody involved in global trade and I'm happy to see this materializing in compliance and doing something good for the environment."