Julian Clark's take on six scenarios for shipping in 2020
"On the basis of scenario 1, if there is limited fuel available, through simple supply and demand it would be expected that the price of low sulphur compliant fuel would increase. However, in this scenario the price increase could be offset due to the low enforceability. If companies are under commercial pressure to continue operations and no compliant fuel is available, if there is a low level of enforceability some of them are likely to take the risk of carrying and using non-compliant fuel in order to continue their businesses. In such a scenario if heavy fuel oils are still used there would not be an additional cost and freight rates would not be affected..."
These are the responses in full of Hill Dickinson's Global Head of Shipping, Julian Clark, to the scenarios outlined in our article, Six Scenarios for Shipping in 2020. Clark provides some useful background detail to the six scenarios and considers the legal ramifications on non-compliance for vessel owners.
The scenarios are as follows.
- The limited fuel availability, low enforcement scenario.
- The limited fuel availability, high enforcement scenario.
- The high MGO, low ULSFO scenario.
- The low MGO, high ULSFO scenario.
- The adequate fuel availability, low enforcement scenario.
- The adequate fuel availability, high enforcement scenario.