THE EFFECT OF THE REVISED1999/32/EC DIRECTIVE ON THE LINER SERVICE DESIGN IN CONTAINER SHIPPING MARKET

The revised sulphur Directive 1999/32/EC aims to transpose new and stricter requirements agreed by the International Maritime Organization (MAPROL ANNEX VI), into the EU law. The sulphur cap in Emission Control Areas will be lowered from 1,5% to 0,1% by the beginning of 2015. Outside the Emission Control Areas the sulphur cap will be lowered from the current 4,5% to 0,5% in 2020. This paper analyzes the effect of the upcoming European legislation on the liner service design in container shipping market. This paper assesses the importance of the bunker costs on the liner service design of container shipping on the North Europe – East Mediterranean route. With respect to the available options that shipping lines have in order to comply with the Directive, the paper develops a cost model to simulate the impact of bunker cost changes on the operational costs of the specific route. The cost model presents that deploying an extra vessel in times of overcapacity and slowing down in terms of speed, will create great economic and managerial benefits.