Length: 3200 words ± 10% Task description & requirements From 1 January 2020, all ships operating anywhere in the world will be required to use fuel which contains a maximum sulphur content of 0.5%...

According to new requirements of international Maritime Organization (IMO), all the ships will require to use fuel with a maximum of 0.5% mm (mass by mass) sulfur content under regulation 14.1. It applies to all the ships in the world operating in the areas outside emission control areas (ECA). It is to be noted that presently the sulfur content in fuel is 3.5 % out of the ECAs. In ECAs, the maximum limit of sulfur content is 0.10% which will remain the same after January 1, 2020, under regulation 14.4. This is an important step to disc decrease the emissions of sulfur oxide from the ship. The rationale of imposing the new IMO requirement is the reduction of health problems, lightning Storms and acid rains on popular routes of trade.
It is high time all the people should understand that there is a need for international cooperation because the world is in danger. The reasons are an extreme level of pollution and the diseases that are caused by harmful gases. The shipping companies transport the products that are used by people in the world and if because of the fuel getting consumed in transporting those products is creating extreme harm to the environment and ultimately to mankind, very urgent action is it's necessary. All the creative and intelligent Minds must understand their responsibility and work sagaciously towards making IMO 2020 a huge success.
Task 1 
Identify the likely technical management and commercial management challenges faced by the three shipping companies in meeting the new sulfur content requirements.
After this new IMO requirement, the shipping companies are left with some options to meet low sulfur bunkers. The first option is to run the ships on liquefied natural gas. The second option is to get an exhausted gas cleaning system (EGCS) installed to make sure the air emissions are processed. These are called scru
ers and their function is to clean the engine of the ship by removing sulfur oxides and exhaust gases of the boiler. With scru
ers, the shipping companies can continue using high sulfur fuel oil (HSFO) fuels. The third option is to use Marine gas oils (MGO) or a low sulfur fuel (LSFO). 
Some challenges are also associated with these solutions in terms of costs and challenges. The cost of marine gas oils and other low sulfur fuel oils is estimated to be 50% more from the year 2020. The cost of installation of scru
ers can be between $5 and $10 million. The installation of scru
ers can take more than 6 weeks. The availability of manufacturers scru
ers is limited all over the world. The shipping companies may have to make the tough decision of sending their ships to the graveyard of Shipping by the beginning of 2020 because of the need for huge investment in these old ships with scru
ers. The challenge associated with the shipping companies using LNG fuels will suffer from a need for extra physical space. The new LNG containers can take about 3% of the physical space of the vessel. The buying price of liquefied natural gas we also increase by up to 50% as compared to the present price. The impact on shipping companies like Pelican shipping Australia, Hercules bulk ca
iers and Orchard container lines have been taken into consideration in terms of the technical and commercial challenges.
Challenges faced by Pelican shipping Australia
Pelican shipping Australia is one of the leading industry players. It is involved in coastal trade between ports in Western Australia, Queensland and northern te
itory. It has a fleet of five general cargo ships that weigh 2000 gross tons each.
It is to be taken into account that the shipping company invests lesser in research and development as compared to the other competitive players. It proves that it is not in a strong financial condition. However, it somehow manages to be in the market consistently but the IMO requirement will pose certain very big challenges.
The ratio of profitability of the company is below the average of the industry. It may have to either raise the price of the products because the price of transportation is going to be increased to a greater extent after the implementation of the IMO requirement 2020.
It does not invest a huge amount in the latest technologies. This would make technical management a little more difficult. The company may suffer losses because of fluctuations in the exchange rates since Pelican shipping Australia operates internationally. It may be possible because of a sudden expected rise in the price of fuels in the international market. It means that Pelican shipping Australia needs to put extra efforts for technical management if challenges immediately a
ive in its path.
If the company has 5 cargo ships of 2000 gross tons each, it may have to invest millions of dollars. The price of cargo ships is very expensive even for resale then it requires a huge investment in getting new ships manufactured. This option of investing in new ships has to be considered in case the ships have got very old to invest in getting the scru
ers installed in them. Each scru
er will incur the cost of at least $5 million.
Investment of $5 to 10 million dollars for installation of scru
ers in 5 cargo ships would call for an investment of a minimum of $25 million and a maximum of $50 million. This is a very big amount for Pelican shipping Australia because it is already in financial challenges. 
The investment of millions of dollars in the coming year seems to be difficult and...