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Maritime shipping is a complex industry that involves several stakeholders and has a significant financial and environmental impact. Currently, sustainability is the main focus of the shipping industry. Many regulatory changes have been introduced to enhance atmospheric and security standards, aligning with the new challenges that arise with time. You must be updated with those regulatory changes in the shipping lines, cargo owners, or freight forwarders to ensure that you are legally compliant.
This comprehensive blog will help you understand the regulatory changes in the shipping industry, why adhering to them is so essential, and their impact on the maritime shipping industry.
What are the latest regulatory changes in maritime shipping?
Standard organizations such as IMO (International Maritime Organization) are introducing regulatory changes in the shipping industry. It ensures sustainability in the environment and the safety of the cargo. We will discuss the latest regulatory changes in maritime shipping:
- IP Code: IMO has introduced a new regulation for securing vessels that carry Industrial Personnel (IP). The XV chapter of SOLAS implemented it and enforced it on 1 July 2024. It applies to ships of volume 500 gt or more engaged in foreign trade, carrying more than 12 personnel, already-made vessels that are not permitted to carry industrial personnel, and all vessels constructed on or after 1 July 2024.
- Mandatory single window: This maritime cybersecurity law in the FAL (Facilitation Committee) requires different types of ports to use a single-window system to manage port operations and logistics information technologically. Under this, the data about the exit, entry, and departure of the ships and the data must be submitted to a particular team or individual who is managing the records. This will prevent data duplication or hacking.
- Natural gas fuel safety: MSC 108 sets the shipping fuel regulation that has changed the LGF Code (Low Flashpoint Gases or Fuels) for ships’ use of natural gas. It has also revised the rules for fueling systems and related tasks. It has updated the requirements for tank pressure relief valves and clarified the tank’s pressure and temperature. It has also defined the requirements for backup systems.
- Carbon Intensity Indicator (CII): This is a new metric used to measure carbon emissions from shipping practices. CII aims to decrease the shipping industry’s contribution to climate change. It was recently inculcated in the international trade regulations for shipping. From 2023 only, the ships were graded from A to B based on their sustainability. Ships with grade E have to modify their structure or operations accordingly.
- Fire safety in ro-ro passenger ships: Ro-ro passenger ships carry vehicles such as cars and trucks. They are prone to fire accidents, and there are some amendments or shipping safety protocols to the SOLAS chapter II-2. The amendments are:
- Need for new fire extinguishing systems on the decks carrying vehicles.
- Particular requirements for heat detection systems.
- Polar code: IMO has also implemented a polar code that sets guidelines for traveling through polar terrains. These areas are prone to accidents due to their low temperatures. The emphasis is on ship structure, equipment standards, and environmental protection.
- Electronic data exchange: The amendment has made keeping records of the ship’s arrival, exit, and departure mandatory for container port operations to ensure that they have all the data related to the shipments in the global maritime trade.
- Restriction in the Mediterranean Sea for fuels: A strong Mediterranean Emission Control Area (ECA) is built under this regulatory change. Under this area, different ships must be careful about the sulfur levels or use any other fuel for container transportation.
- EEDI (Energy Efficiency Design Index): This regulation measures and analyzes carbon dioxide emissions in the environment and decides the minimum efficiency requirements for new ships to reduce shipping carbon emissions. This metric aims to increase the use of energy-efficient tools and engines.
Why regulatory changes in maritime shipping are crucial?
There have been many regulatory changes in shipping because of the evolving maritime industry. These shipping regulations maintain a uniform environment for the people so that no one can arbitrarily perform the operations. So, let’s understand why these changes are essential:
- Security: The regulatory changes in maritime shipping in 2024 aim to improve security standards and decrease risks related to carrying dangerous and sensitive goods. In addition, provisions for autonomous shipping and fire safety for RORO ships are some regulations the IMO sets to ensure the shipment’s safety.
- Environmental protection: These regulatory changes are more focused on maintaining the sustainability of the environment, as pollution is the primary concern nowadays. Most of the laws, like carbon intensity indicators and natural gas fuel safety, aim to minimize the impact of shipping on the environment and promote sustainable logistics.
- Keep up with technological changes: With time, shipping is moving towards automation and many other technological advancements. Therefore, regulations must limit and supervise those changes so people will not use them incorrectly. The industry is also shifting to alternative fuels and more developed navigation and communication networks. To keep up with this change, the regulations also need to evolve.
- Reputation: Compliance with these regulatory changes will keep your cargo safe, increase efficiency, and protect the environment and marine transport safety. If you do not adhere to them, it can result in severe penalties, loss of business, and damage to your reputation, which is unsuitable for your business.
- Economic benefits: Although initial investment is required to manage compliance, it will benefit your business long term. It will protect from any kind of mishap. Executing these environmental protection and safety-compliant laws will make your shipment smooth and efficient.
Key regulatory bodies managing regulatory change
Under maritime shipping, some specific regulatory bodies manage the shipping regulations and regulatory changes. We will have a look at all the regulatory bodies:
- IMO (International Maritime Organization) is the main regulatory body in the shipping industry. These organizations decide the rules, and then small entities and organizations adopt those rules. The United States government has established this organization. The regional organizations that follow the IMO guidelines are the European Maritime Safety Agency (EMSA), the Federal Maritime Commission (FMC) for the United States, the Maritime Safety Administration of the People’s Republic of China (CMSA), which have laid down the cargo security standards.
- SOLAS (Safety of Life at Sea) is the organization that monitors the minimum requirements for merchant ships. Also, SOLAS manages the structure of the carriers, the equipment used, and the implementation of the shipment. It covers all the main security measures.
- MARPOL (International Convention for the Prevention of Pollution from Ships) is the organization that sets rules to prevent maritime pollution. Under this, the limit of sulfur use is 0.5 % to avoid pollution.
- STCW (Standards of Training, Certification, and Watchkeeping for Seafarers) is the international convention that sets the standards for all individuals working on commercial ships internationally.
- As an organization, the MLC (Maritime Labor Convention) sets the rules for protecting seafarers’ rights. Under this, the workers must have the proper working and living conditions.
What are the challenges in complying with new shipping regulations?
It is a bit complex for the shipping industry to comply with the regulatory changes. The documentation process and rules set by prominent organizations are a little challenging to follow. Therefore, here are the challenges face in complying with new shipping regulations:
- Managing the customs clearance: Clearing all the documentation so there is no hindrance during the journey is an important task, yet it is challenging to manage. Also, people who do not have the correct documentation face consequences like penalties or suspension of the license.
- Technological investment: Initiating technological and regulatory changes is prevalent in the shipping industry. So, initially, introducing technology in shipping is quite expensive for companies.
- Supply chain disruptions: Supply chain disruptions are the main challenge in maintaining shipping regulations. Events like natural disasters, pandemics, or geopolitical tensions worsen the conditions and create hindrances to adhering to the regulations.
- Environmental regulations: Undoubtedly, regulatory changes ensuring that shipping does not affect the environment are much needed for development. However, adhering to those regulations becomes difficult for shippers because of the required cost and management.
- Managing the workers: To comply with all industry regulatory changes, companies must hire a specially trained team to keep up with them. Hence, this logistics challenge requires cost and time, which is difficult for shipping companies to manage.
How to stay updated with maritime shipping regulations?
Lastly, you need to update yourself about all the regulatory changes in the industry. You can build a specialized team or follow certain principles:
- Recognize the applicable regulatory changes: Update yourself with the changes applicable to your jurisdiction, type of ship, cargo, and route. You must contact the authorities, industry associations, or legal organizations. You can have an automated regulatory management system to inform you about all the recent changes in your industry type.
- Assess the impact of changes on your business: You must check the impact of all regulatory changes. Therefore, you should conduct a detailed analysis of risks, policies, authority, and reports that need revisions.
- Distribute the regulatory responsibilities: Train the workers according to their compliance with undertaking the operations and manage the port logistics. After that, you can distribute the responsibilities among the teams so that there is no compliance.
- Update yourself with the regulatory changes: Join conferences, webinars, newsletters, and industry associations for any updates regarding business regulations.
- Continuous monitoring: The shipping industry needs to keep up with the internal updates that the companies are decently following. They must execute continuous monitoring to help supervise the industry’s inside work.
Different organizations in the shipping industry set maritime shipping regulations. This ensures environmental protection, cost efficiency, and the prevention of accidents involving workers and cargo. With the evolving industry, there are many regulatory changes that industries should follow. You must update yourself with every piece of information to avoid legal implications. It is your responsibility to comply with these changes, so be in touch with the legal organizations and industry associations.
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