Sulphur caps to cost box shippers billions
As of January 20...
New sulphur emissions regulations have cost the container shipping industry an estimated US $500 million, the OECD reported last week.
As of January 2015, ships entering Emissions Control Areas from parts of Europe to the coasts of North America were mandated to use pricier ship fuels with less than 0.1 percent sulphur content – marking a significant reduction from the previous one percent sulphur limit.
There will be a global sulphur cap of .50 percent instated by 2020, which is projected to cost the industry anywhere between US $5 billion and $30 billion annually.
A combination of both falling freight rates and container shipping profits is going to leave shippers and cargo owners picking up the bill.
The OECD said: “We will assume that container shipping lines have limited possibility to absorb cost increases, so they will likely transfer these to their customers.”
The report anticipates issues of compliance with the proposed restrictions.
Detection of noncompliance is most effectively carried out using airborne “sniffer” aircraft, but deploying these at sea is not always cost-effective. Historically, violating emissions regulations has not been consistently penalised.
“These challenges would need to be resolved before the 0.50 percent requirements enter into force,” said the OECD.
“Considering the significant costs to the shipping industry, effective enforcement is of utmost importance to guarantee a level playing field.”
SOURCE: [The Maritime Executive]
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany