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FMC Gives Green Light for Transpacific Lines to Address Environmental Issues

Discussion of slow-steaming strategies a first step…discussion agreement sees evolving industry role going forward.


Oakland, CA / February 19, 2010 – The U.S. Federal Maritime Commission, after a 45-day review, has allowed container lines in the Transpacific Stabilization Agreement (TSA) to discuss and coordinate strategies that will reduce air and water pollution, as well as vessel fuel consumption.

“This is a thoughtful, forward-looking step taken by the Commission, under the leadership of Chairman Richard Lidinsky, to promote industry initiatives to address the global shipping industry’s impacts on the environment,” said TSA chairman Y.M. Kim, who is also CEO of Seoul, Korea-based Hanjin Shipping Co. Ltd. “Governments, international organizations, local communities, ports and marine terminal operators worldwide are focusing new attention on cargo shipping operations – at sea and shoreside – with an eye toward cutting air and water pollution. This new authority permits TSA carriers to work together, and with their shoreside customers and partners, to address strategies and best practices that ensure both environmental protection and trade growth.”

TSA, since its inception in 1989, has provided Asia-U.S. shipping lines with authority to meet and exchange limited market information in order to adopt common industry standards and practices, represent the industry before government bodies, and establish non-binding guidelines that help stabilize otherwise volatile rate levels and shipping practices.

“Environmental issues and strategies are definitely a new area of involvement for TSA, but in many ways it’s a logical progression,” said TSA executive administrator Brian M. Conrad. “TSA, and carrier groups like it in other trades, routinely adopt common service standards in providing equipment, in designing information systems and in regulatory compliance. Environmental programs are going to play a critical role and entail major investment in carrier operations; it makes commercial sense that these be undertaken, where feasible, based on joint research, sharing of best practices, and coordination to promote environmental responsibility and operational efficiency.”

A vital first step that TSA lines believe can yield immediate, significant results, Mr. Kim indicated, is through information-sharing on carrier “slow-steaming” strategies. Under slow-steaming, carriers reduce the speeds of a string of vessels, with each vessel burning significantly less fuel and producing lower emissions. Industry studies have shown that a reduction in vessel speed from 24 to 18 knots per hour reduces consumption of marine bunker fuel by 60%; reduces consumption of heavy marine diesel oil used in onboard operations from 190 to 177 tons per sailing; and cuts vessel CO2 emissions by more than 350 tons per day on a sailing lasting from two to four weeks or more, depending on route.

But challenges have surfaced as use of slow-steaming has become more widespread, Mr. Kim explained. “To achieve true, lasting environmental benefits from slow-steaming, carriers need to share information that will help them reduce emissions without disrupting carrier service levels,” he said.

In the future, Mr. Kim added, it will be important for carriers, ports, terminals, regulatory agencies and customers to communicate and jointly address issues such as running ships in port off shoreside power; disposal of waste bilgewater; use of alternative fuels at sea and in terminal operations; and programs to replace and retrofit harbor truck fleets.

Mr. Conrad noted that TSA has, during the last two years, held a number of meetings with individual customers and shipper groups to discuss a range of cost and operational issues in the Asia-U.S. freight market. “While carriers and shippers have not covered environmental matters in any detail so far,” he said, “customers have expressed interest in doing so because of the potential service and rate impacts, and the potential benefits of extending their internal green initiatives to include their entire global supply chains.”

TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports and inland points in the U.S.


Members include:
APL, Ltd.

China Shipping Container Lines

CMA-CGM

COSCO Container Lines, Ltd.

Evergreen Line

Hanjin Shipping Co., Ltd.

Hapag Lloyd AG

Hyundal Merchant Marine Co., Ltd.
Kawasaki Kisen Kaisha, Ltd. (K Line)
Maersk Line

Mediterranean Shipping Co. CMA-CGM
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Inc.
Yangming Marine Transport Corp.

Zim Integrated Shipping Services


Contact:

Niels Erich
T: (415) 525-4520
F: (415) 358-4540
E: n.erich@comcast.net


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