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The impact of low sulphur fuel requirements in shipping on the competitiveness of roro shipping in Northern Europe
Notteboom, T. (2011). The impact of low sulphur fuel requirements in shipping on the competitiveness of roro shipping in Northern Europe. WMU Journal of Maritime Affairs 10(1): 63-95. hdl.handle.net/10.1007/s13437-010-0001-7
In: WMU Journal of Maritime Affairs. World Maritime University: Heidelberg. ISSN 1651-436X; e-ISSN 1654-1642
Peer reviewed article  

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Trefwoord
    Marien
Author keywords
    Roro shipping; Fuel costs; Modal competition; Baltic; Sulphur; IMO

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  • Notteboom, T.

Abstract
    Annex VI of the MARPOL Convention aims for a reduction in sulphur oxide emissions from ships. The limits applicable at sea in Emission Control Areas (ECAs) were reduced from 1.5% to 1% in 2010 and are planned to be further reduced to 0.1%, effective from 1 January 2015. This paper analyses the impact of the International Maritime Organization’s Tier II/III standards introduced by Annex VI amendments adopted in October 2008 on costs and prices of roro (roll on/roll off) traffic in the ECAs in North Europe and on the competitiveness of roro shipping in the ECAs compared to trucking. We demonstrate that the new Annex VI agreement may be quite costly for the participants in the shipping industry and will result in higher freight rates. Based on a detailed price analysis on modal competition between the roro/truck option and the ‘truck only’ option on thirty origin–destination routes linked to the ECAs, we conclude that the use of low sulphur fuel is expected to increase the transport prices particularly on the origin–destination relations with a medium or long short sea section. The paper also presents the results of a survey among leading short sea operators in the ECAs in view of providing more insight on expected modal shifts and price elasticity in the short sea market.

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