China-Russia Form New Partnership, EU Threatens Carbon Emission Law & Tankers Face Oil Shortages and Delays

Welcome to our latest eCommerce and logistics news roundup!

This week, we’re talking about how a new China-Russia initiative will improve eCommerce shipments between the two countries, navigate the complexities of how a unilateral carbon emission law from the EU could affect global shipping, and what issues with oil is doing to the shipping industry.

New China-Russia Partnership Will Facilitate Cross-Border eCommerce

Two of the biggest postal services in the world - Russia Post and China Post - have agreed on a new logistics service that will make shipping small traceable packages between the two countries much easier.

Called cPacket, the joint development is the latest effort by the two countries to smooth the way between the world’s manufacturing hub and its biggest market. Shipments by cPacket will be handled by RP Logistics, a China-based Russia Post subsidiary. It will be bolstered by a new aviation logistics scheme.

Easyship’s Take: This is great news for online retailers in China and consumers in Russia. The new service will allow China-based retailers to easily make fast deliveries to Russia which can drive sales from the massive neighboring market. Similarly, Russian consumers can expect faster deliveries from a more stable shipping option.

Europe Threatens to Regulate Shipping Carbon Emissions

The European Union will propose a unilateral law to curb shipping carbon emissions. The proposal could have huge ramifications across the shipping and logistics industry.

In a speech delivered at the United Nations Climate Conference (CO25) on December 2, the President of the European Commission, Ursula vonder Leyen, made clear that the EU is taking big steps to protect the environment and stop climate change. She said that the European Green Deal, which was presented on December 12, will propose the first-ever European Climate Law to extend emission trading to all relevant sectors, including transport. The proposal is due to be made in March 2020.

Of course, this type of initiative was first floated in an International Monetary Fund (IMF) white paper in 2018. And with the sluggishness of both organizations, and a big doubt over whether all EU countries would vote in favor of the law, it remains to be seen whether this law comes into effect.

Easyship’s Take: We love hearing about anything that’s good for the environment and can make inroads into slowing climate change. But this unilateral law remains a big if. If it does pass, it will take a long time to come into effect and for shipping companies to comply. Higher costs are the main consideration here. Shipping companies will have to pay more to make changes to their fleets; these costs will be passed onto retailers, who will then be forced to pass them on to consumers. Overall, it might be a win for the environment, but it’s a lose-lose situation for the average punter.

Shipping Delays as Tankers Switch to Eco-Friendly Oil

The worldwide shipping industry is facing significant delays as tankers scramble to make the long-anticipated switch to environmentally-friendly marine fuels.

Mandated by New International Maritime organization (IMO) rules - better known as IMO 2020 - the move aims to make shipping greener by preventing ships from using fuels that contain more than 0.5% sulphur unless they’re equipped with exhaust-cleaning systems called scrubbers. The rule means that from January, most ships will have to load low sulfur fuel oil (VLSFO) or expensive marine diesel.

The regulations have been on the radar since 2016, but of course, no one’s taken much notice. That means oil producers and shippers are battling to make the switch over the next few weeks, creating total chaos.

Only a minority of ships currently have scrubbers installed. In addition, producers of VLSFO and marine diesel haven’t quite managed to produce enough of the necessary fuel - or the means to transport it to shippers around the world. The result? Shipping delays across the world.

Easyship’s Take: Delays are never good, and the shipping industry is going to have to find a way to solve the problem, quickly. Delays are currently estimated to be 10-12 days in Singapore, Brazil, Gibraltar and Malta, and a week in Middle Eastern ports like Fujairah. Of course, this means you’ll want to plan ahead if you’re going to be doing some shipping soon. Plan well ahead to make sure you won’t face any issues caused by these delays.