Shortsea European Services will still suffer because of low-sulphur rules

The cost difference between road fuel and marine low-sulphur fuel means traffic will still switch from sea to road.

Shortsea shipping lines will continue to face additional pressure because of stricter low-sulphur fuel regulations, despite a rapid decline in the cost of fuel over recent months.

Spliethoff said the January 1 regulation requiring the use of fuel with a sulphur content of 0.1% instead of the previous 1% limit in the English Channel, North Sea and Baltic Sea had pushed up shipping costs in relation to road transport, despite declines in the cost of low-sulphur fuel over recent months.

In November, Spliethoff subsidiary Transfennica announced it would cut its service linking Bilbao, Portsmouth and Zeebrugge at the end of December because of the higher cost of using low-sulphur fuel.

It estimated that 50% of trailer volumes would return to the road as a result of the new regulation.

But since then, low-sulphur fuel prices have rapidly declined; in mid-November, marine gasoil from Rotterdam cost around $720-$730 per tonne, while this week it has fallen to around $470 per tonne.

But Transfennica pointed out that the cost of road fuel had also fallen.

There also remains a wider cost differential between the price of road fuel and marine gasoil than there is between road fuel and fuel oil.

This meant the cost of shipping had still increased compared with road transport, following the implementation of the low-sulphur regulation.

Danish ro-ro operator DFDS also closed its route between Esbjerg and Harwich in September, with the low-sulphur regulation partly to blame for the decision.

Source: European Shortsea Network.