World's Largest Shipping Company MSC Sees CII Cutting Boxship Capacity by 7-10%

by Ship & Bunker News Team
Wednesday November 2, 2022

Container line MSC, the world's largest shipping company, sees the upcoming Carbon Intensity Indicator (CII) rules cutting global container capacity by as much as 10% from next year.

The regulation's idiosyncrasies risk bringing unintended consequences, a company representative told Ship & Bunker by email.

Under the new system, which officially came into force this week, from January 1 all vessels larger than 5,000 GT will need to have calculated for them a CII rating based on historical data submitted to the IMO. The rating is a calculation of the CO2 the vessel emitted per unit of cargo capacity per nautical mile.

The rating will come as a letter between A and E, with A at the top of the scale, and ratings will be determined on an annual basis. Ships receiving a D rating for three years or an E rating for a single year will need to implement a ship energy efficiency management plan setting out their plans to improve their performance.

Unintended Consequences

"Based on estimates, CII is expected to absorb about 7-10% of capacity across the global container fleet [i.e. across multiple shipping lines] as vessels are deployed to meet both the needs of customers and the required CII standards," the MSC representative said on Tuesday.

"As many across academia and industry have said, the calculation methodology (AER/DWT) should be revised to avoid unintended consequences that would distort the performance of a ship that spends a lot of time in port.

"As things stand, the proposed methodology could lead to situations in which a vessel's rating would worsen simply because it spends more time in port.

"We respectfully question whether this unintended consequence could be avoided by amending the methodology.

"As others have said, CII should not effectively penalise vessels trading on shorter distances and while waiting alongside.

"It would be far better to have an operational indicator that would reward more productive ships, including based on cargo carried rather than on a theoretical value that may not correlate to transport work performed."

Energy Efficiency

For MSC's part, the company will 'support and fully comply with' the rules, focusing on energy-efficiency measures, the firm said.

"As there are no net zero CO2 emission fuels available at scale to our industry in the short-term, MSC will continue to make energy efficiency performance improvements to help ensure that the fleet keeps pace with the evolving regulatory standards in 2023 and beyond," the representative said.

"MSC will continue to harness the latest ship design and technologies to modernise its fleet, by retrofitting older vessels and incorporating new buildings that include the world's largest and most energy-efficient container ships.

"On top of a range of design and technology efficiency measures, we have assessed that it will not be possible to achieve the required standards without a new programme of voyage optimisation that includes elements such as speed reductions and injecting additional ships into the network.

"Just-in-time port call optimisation will also play a role."

MSC overtook AP Moller-Maersk as the world's largest shipping company by capacity earlier this year. The company has been a significant investor in LNG-fuelled tonnage, as well as taking on biofuel blends for some of its ships calling at Rotterdam.