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New shipping rules are on the horizon. Is your supply chain ready?

On Jan. 1, the new International Maritime Organization regulation for reducing the sulfur content of marine fuels from 3.5 percent to 0.5 percent will take effect. With the change comes the need for inspections and enforcement to give the new rule "teeth" and force compliance.

IMO 2020 stipulates that oceangoing vessels must use either cleaner bunker fuel, install on-board gas stack scrubbers to clean the higher sulfur fuel or switch to an alternative marine fuel such as liquefied petroleum gas, liquid natural gas or methanol.

In early 2018 when it embraced this approach, the IMO clearly was thinking of noncompliance and offered additional mechanisms to tighten enforcement and force compliance. Two of those mechanisms included providing Port States, which handle inspections, with additional authority to enforce IMO 2020 rule compliance and a potential loss of insurance for those shippers/owners not in compliance with the lower sulfur fuel or on-board scrubbers.

Looming consequences of IMO 2020 noncompliance

Even with additional administrative "teeth," actions speak louder than words. Two recent examples speak to the seriousness of enforcement and penalties for noncompliance that shippers/owners can expect.

In April, Singapore issued a statement to discourage noncompliance with the low-sulfur ban. The Maritime and Port Authority of Singapore stated that "captains and owners of vessels that burn overly sulfurous fuel could face as long as two years in prison from the start of 2020." Penalties would be maximized if the shipowners and crew were found to falsify documents or obstruct routine investigations.

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