Drewry’s special report assesses the impact on the chemical and product shipping markets to provide an invaluable, in-depth review.
Executive summary:
Introduction – a history
Assessment of MARPOL 73/78 Annex II
Impact of re-classification
Future prospects
Analyses:
Types of vessels
MARPOL 73/78 Annex II
Other affected cargoes
The EU Hygiene Directive 2004
The Intertanko model updated and adjusted for the revised IBC/MARPOL Annex II adopted by MEPC 52 and MSC 79 in December 2004
Trade oils, fats, molasses, UAN etc
Market structure
Audience:
Charterers
Owners
Brokers
Major impact on trade
Drewry’s topical report is of great strategic value for charterers, owners and brokers to establish which operators control vessels, where they are trading and what their operational comparisons are. Findings include:
Ocean chemical tankers may be encouraged to trade to 30 years and beyond, thus continuing to service the vegetable oil trade.
Accelerated removal of single hull, mostly non-IMO, vessels generally referred to in the past as “vegetable oil or molasses” tankers.
The overall market absorbs and adapts to changes, but becomes more tied to the fluctuations of the clean petroleum and chemical markets.
Report purpose :
Drewry's Chemical and Product Tankers topical report was prompted by the recently agreed revisions of the IMO IBC Code, and MARPOL Annex II, which led to the re-classification of oils and fats, and certain other important chemical cargoes. Drewry’s overall objective is to determine the impact of these changes on the chemical and product tanker shipping industry.
Drewry started its analysis based on the independent Intertanko study of the chemical and products tanker fleets and of the available tonnage, involving over 1,100 vessels. The broad assumptions made within the study are examined by Drewry in its quest for accuracy and correct interpretation.
Introduction
Ten years ago, shortly after the 1993 implementation of double hull requirements for all new buildings in the product trade, the estimated volume of oils and fats moved by sea was around 25 million tons. This volume did not require IMO class tonnage for shipment, but could be carried by practically any ship possessing an NLS certificate. Since then the IBC Code and MARPOL Annex II have been under full review by the IMO.
By 2003, according to Drewry, the trade volumes of oils and fats had increased to 38 million tons, 34% were soft oils, 62% tropical oils.
A compromise
During 2003 IMO was clearly moving towards re-classifying oils and fats as IMO 2 cargo, for implementation by 2007. Drewry highlights the concern that there would be inadequate tonnage for the carriage of the forecast 48 million tons of oils and fats by 2007 as a trigger for reaching an important compromise.
It was agreed that flag states could grant IMO 3 vessels a waiver to carry oils and fats, provided they could meet laid down double hull, stripping and certain other technical requirements.
Conclusions
Within this report, Drewry forms an opinion on the IMO 3 chemical tonnage compromise and how it will affect the future carriage of chemicals and non-oil products, including oils and fats – will there be enough tonnage available and will it be able to be conducted to a safe and efficient standard in the future?
Drewry also reaches a conclusion on whether the future carriage of oils and fats, and how much, will rely on the IMO 3 double hulled tonnage that has been put in place over the years both before and after the 1993 MARPOL Annex 1 14 f regulation, not forgetting tonnage on order. Will owners and operators of such tonnage will be in strong positions to take advantage of what should be a healthy freight market?
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