European OEMs are looking to shortsea shipping to reduce carbon emissions when moving new vehicles. Shortsea shipping offers an environmentally sound option at a cost-effective price. The environmental impact will be reduced with advent of IMO 2020 which comes into effect in January 2020 and aims to bring down maritime sulfur emissions to a global cap of 0.50%. In response to the move by OEMs Belgian shortsea shipping and logistics company, Euro Marine Logistics NV (EML) has introduced a new trade route in the Black Sea area to connect Greece with Russia and Ukraine. EML was formed in 2011 through a 50-50 joint venture between Japanese shipping major Mitsui O.S.K. Lines, and the Norwegian Höegh Autoliners.
The line integrated the existing European shortsea and logistics activities of both shareholders and of Euro Marine Carrier. “By consolidating the activities, know-how and vast experience of the mother companies, EML aims for delivering the best possible services to all customers of the group. Both MOL and Höegh Autoliners have internationally recognized certification to ISO 9001 quality management and ISO 14001 environmental management standard and it is applied to all its vessels owned / operated by the two mother companies,” says EML. Under this group umbrella, all ISO requirements for safe management and environmental awareness are cascaded down to EML and cover all its operations, allowing EML to follow the same operations and quality procedures as its two ISO-credited owners. The new fortnightly Black Sea service, using a pure car carrier (PCC), has a capacity for 700 CEU (car equivalent units) and adds to EML’s already-strong experience in the light vehicle sector. EML ships over 1.2 Million vehicles for a host of global OEMs annually. “Euro Marine Logistics has extensive experience in the factorynew light vehicle sector, where we partner with many global manufacturers. We also transport high-and-heavy equipment and our professional staff are ready to accommodate a variety of cargo: heavy machinery, tracked units, cranes, buses and much more. EML does not own any ships but charters them in mainly from the two mother companies to meet customer service requirements,” says the company. It is among the top three vehicle shortsea operators in Europe, and has a fleet of 12 vessels which include small (700 CEU), medium (1,500 CEU) and large (over 3,000 CEU) carriers. It has an extensive network in the Mediterranean, continental Europe, the United Kingdom and the Baltic regions. EML has a capacity of 25,000 CEU on six shipping routes and serves 27, commercial ports in 17 different countries,” says the company.
Automotive Industries (AI) asked Marc Pauwels, Managing Director, Euro Marine Logistics, how the IMO 2020 sulfur emissions cap will affect the line. Pauwels: EML is part of the Trident Alliance which is a coalition of shipping owners and operators which are working on bringing down maritime sulfur emissions. Since EML is burning currently over 40,000 kt of heavy fuel per year outside the emission control area, the impact on EML is important. As with our owners, we fully support the new regulations as these will improve the environment – which is our obligation. After careful evaluation of the alternative methods of IMO 2020 compliance, we have chosen to use very low sulfur fuel oil (VLSFO) and low sulfur marine gas oil (LSMGO) in order to comply with IMO 2020. The preparation of the entire fleet for the change in fuel is ongoing. It includes the cleaning of all tanks, which need to be compliant before 1 January 2020. On the commercial side, we have been working towards commercial contracts reflecting the cost for preparation for and usage of the new compliant fuel.
AI: How is EML’s reach expanding into new geographical areas? Pauwels: EML's network is quite dynamic and is adapting rapidly to the requirements of the local and overseas car producers. Today we cover the entire region from St. Petersburg, Russia all the way south till Turkey. And just earlier this year we added a service into Black Sea (Novorossiysk and Chornomorsk). Trade friction and tariffs will continue to generate risk in global planning, especially with the European Union. At the same time, more stringent emission regulations, especially in the form of new carbon dioxide requirements in Europe, have automakers counting more heavily on sales opportunities in electrification Therefore, production shifts at short notice will be unavoidable and the agility of the shortsea carriers to adjust service networks will be crucial to support the automotive industry.
AI: What is the new vs used vehicle split? Pauwels: EML's core business is brand-new vehicles. Used vehicles and privately-owned vehicles are only transported occasionally and are subject to specific cargo acceptance standards.
AI: Similarly, what is the breakdown of lighter vehicles and heavy vehicles? Pauwels: EML's main portfolio consists of 95% of light vehicles. High and heavy or static cargoes represent only 5%. Until last year, our vessels were mainly PCC types with limited ramp capacity and deck height. During 2019, we have been gradually adjusting part of our fleet type, allowing us to accept more heavy units, for which there is growing demand.
AI: How has EML’s strategy changed taking into account cars of the future – what infrastructure do connected cars and ‘green’ cars require? Pauwels: By 2020, experts estimate that 250 million connected cars will be on roads across the globe. In this respect, several of the world’s leading automobile companies are exploring the applications of block chain technology, not only to further improve vehicles’ operating systems, but also to control how their vehicles, interact with the world around them, and that includes the logistics’ partners. The connected car will soon be the block chain connected car, allowing full supply chain transparency amongst many other benefits. This is an evolution EML wants to be part of.
AI: How is EML leveraging on the strengths of its two parent companies – MOL and Höegh Autoliners? Pauwels: The link between EML and its parent companies has always been very tight. Over 90% of EML's tonnage has always been provided by the owners, and EML can rely on the technical support of the owners. In return, EML is providing a feeder network in EU waters as an extension to the owners' deep-sea activities. This results in consistent synergies on services as well as on the routing of cargo, which is more important than ever considering the current uncertainty in the global automotive industry.