Fratelli Cosulich’s Timothy Cosulich discusses the sulphur cap, fuels and why his thoughts on compliance with the sulphur cap have changed over the last 12 months
Timothy Cosulich is chief executive and board member of Fratelli Cosulich, a shipping company that dates back to 1857. The group’s activities span the gamut of shipping operations, including: liner, tramp, yacht and cruise agency, ship management, freight forwarding and NVOCC, travel agency, trading, shipowning, custom broking, IT and real estate. The group has 15 offices worldwide and is well-known in Singapore for its bunkering activities. Mr Cosulich is making two appearances at the Asian Tanker Conference: he will be discussing concerns and preparations for the commercial challenges involved in meeting the 2020 sulphur cap regulations; and will also be presentation on how to counter problems with contaminated fuel.
We asked Mr Cosulich how he sees the current state of tanker market and whether he feels a recovery is likely in the near term?
“I think 2020 will bring some improvement to the tanker market; 2018 was a very bad year, and 2019 is as yet uncertain, but the second half of the year will see more product being sought, bringing a higher demand for tankers and for storage.”
Discussing the current spate of tit-for-tat trade wars, Mr Cosulich notes the impact on Asia has so far been very limited, in terms of tankers and shipping in general. He says: “There is a lot of diplomatic activity [taking place] and in the tankers sector there is the situation with Iran, but this only impacts those dealing in US dollars. China and India companies have a different perspective and are still actively trading with Iran.”
As a bunker supplier, Fratelli Cosulich, is highly involved in regulatory compliance in Asia. In 2018, Mr Cosulich was of the opinion non-compliance with the 2020 sulphur cap would be significant, but a year on, says “I have changed my mind and now I expect the majority [of operators] will comply.”
"I think 2020 will bring some improvement to the tanker market
This change of heart is based on conversations with industry practitioners, but he warns that due to the fragmented nature of the industry, there may be smaller players who fail to comply.
On the subject of fuel, Mr Cosulich says that availability and type post 2020 remain unknowns, a situation he says is down to the oil majors. He says that while in today’s environment it is possible to mix one heavy fuel with another, post-2020 the oil majors may be supplying fuels of different type, making interoperability all but impossible and resulting in fuel management operations all but disappearing from smaller ports, which generally do not have enough storage or barges to offer a wide range of fuels.
The situation with the bunker barge fleet also remains blurred. “The issue is cost and timing,” explains Mr Cosulich. “The barge operator must wait until the refineries and the fuel suppliers decide what product will be available, but they must also wait to see what product the customers will want to buy.”
Scrubbers, says Mr Cosulich, are an unknown when it comes to payback, “It could be five years, it could be shorter – it all depends on the price of the fuel.”
That said, he feels charterers may still favour scrubbers: “For charterers there is less uncertainty if a vessel is fitted with a scrubber, but we have not seen a clear trend that [suggests] charterers prefer scrubbers or not.”
The Asian Tanker Conference is being held on the 26 and 27 of February at the Marina Bay Sands Expo and Convention Centre in Singapore. For more information please click here