Claims related with the IMO 2020 sulfur cap are already here, says Gard

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The IMO-2020 rules have not yet come into force however, according to Gard P&I Club, more than 100 claims related to this regulation have already reached the Club’s desks.

Amid a cloudy environment, where shipowners are still worried about possible fuel quality and compatibility issues, which may arise post-2020 due to lack of transparency, such a statement coming from a leading P&I Club and marine underwriter is really alarming for the whole industry.

According to Gard CEO, Thore Roppestad, some of those claims refer to disputes between Shipowners, Charterers, bunker suppliers and shipyards in regards with the installation of scrubbers onboard the ships. Other claims are related with damages in engines or machinery which resulted from incompatible bunker fuels. Off-hire incidents related to the malfunction of scrubbers are also included in the list of claims.

According to Roppestad, the technical incidents may escalate and create further problems such as groundings or other serious accidents.

Gard’s Chief Executive categorises the claims into two major segments. Those which are directly related with the sulfur cap and those which follow an initial claim related with the sulfur cap. The claims of the second category are more severe, he adds.

Given the circumstances, industry stakeholders put pressure on regulators to emphasise on the quality of the new compliant fuels and increase transparency around their availability.

In the meantime there are major shipowners, such as Bahri ship management, who note that fuel quality remains a serious concern. To get prepared, they are emphasizing to conduct test trials later this year, before they start consuming 0.5% sulfur fuel on their whole fleet.

If there are so many claims even before the commencement of the 0.5% sulfur cap, what is going to happen post-2020? To avoid the worse, the bunker market needs to change with focus put on the quality of the fuels, says IBIA director Unni Einemo.

A similar opinion was expressed by the JP Morgan transportation group chief executive Andrew Darcy, who argued that this is going to be a transformative phase for the bunker and shipping industries. Best practices are going to be followed, the counter-party performance will play a stronger role while the entire industry will become more organised and better behaved than before, he argued.

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