Trailer Bridge Inc.

An important change affecting the shipping industry in 2009 will likely be the establishment of emission control areas (ECAs). Under the International Maritime Organization’s new fuel-quality framework that became U.S. law with the passage of the Marine Pollution Protection Act of 2008, the maximum sulfur content in designated ECAs will be 1 percent in July 2010 and 0.1 percent in January 2015. The ECAs begin a phase-in that will result in a global sulfur cap of 0.1 percent by 2020. There currently are no ECAs in the U.S., but this will change with the adoption of the new framework. Initiatives by the Environmental Protection Agency, the California Air Resources Board and in federal legislation focus on establishing an ECA extending 200 miles around the United States. The Environmental Defense Fund also recently advocated a 200-mile ECA. The EDF has an excellent 45-page white paper on vessel emissions that is accessible at www.edf.org. When U.S. ECAs are implemented, they will affect all vessels coming to the United States. The likely method of complying with the sulfur caps will be to use distillate instead of residual fuel. With many Jones Act vessels, a 200-mile ECA will lead to a complete switch as some spend much or all of their time within 200 miles of the U.S. Cleaner distillate is nearly twice the cost of residual fuel, so switching will raise costs. Many tugs and barges that operate in the Jones Act, however, already use distillate and remain cost-efficient units. As a result, ECAs will lead to further relative cost benefits for tugs and barges across all sectors. Leaner and cleaner Jones Act tugs and barges will be a major beneficiary of the new fuel-quality standards. In terms of cost and environmental aspects, these units are particularly well suited to move containers.