IMO2020: Friend or Foe for Tramp?

Tramp accounts for 40% of global bunker demand. File Image / Image Credit: Ship & Bunker

The International Chamber of Shipping (ICS) believes IMO2020 will be a particular challenge for tramp shippers, but others believe they could be the best placed to take advantage of the upcoming disruption to fuel rules.

Unlike those operating liner services, tramp traders do not follow a fixed schedule so do not have the benefit of knowing far in advance where they will be lifting fuel.

ICS says the issue is that availability of IMO2020 grade fuel outside of the main bunkering ports will inevitably be patchy.

“The tramp trade sector is very concerned,” secretary general Guy Platten told Reuters in a recent interview.

Tramp accounts for 40% of global bunker demand, according to IMO estimates.

Offering an alternative view is Michael Donaldson-Badger, Managing Director at bunker broker NSI in Dubai, who sees tramp's flexibility as its greatest asset for 2020.

"Whilst the liner trade vessels have set routes, relatively easy risk management, known fuel availability and security of supply regardless of whether they choose to go contract or spot, our tramp trading friends have the largest opportunity to do something different to their competitors," he wrote in a note to customers.

"By having a better plan, better knowledge, better optimisation, and better flexibility alongside the traditional KPI's of price and claims, they can achieve a larger than ever cost differential to competing owners."

Helping to clarify the supply picture this month has been a significant rise in the number of ports where 0.50% sulfur VLSFO is now available. Still, Donaldson-Badger notes it remains very much in the early stages.

"We are seeing some ports that have 0.5% compliant fuel but inadequate logistics, and some ports an excess of logistics and not enough product," he said.

"Ultimately, we can all see that the differentials between ports are changing so now is a great time to take a look at the 'we have always done it here / this way' scenarios.”