Confusion regarding the increase in the fuel surcharge for Sulphur 2020

Rotterdam 29-7-2009

According to World Maritime news, the next global regulation of emissions of the International Maritime Organization, IMO, for 2020 has triggered a considerable increase of doubts about its implications in the increase of the BAF or bunker adjustment factor between global carriers, exporters and cargo agents. Demonstrates a study by Drewry, the expert marine transport consultant

The study showed the particular uncertainty and concern about the methods that the lines would use to recover fuel costs and that more than half of the respondents (56%) stated that they did not consider the existing approaches of their suppliers of maritime transport were fair or transparent. In addition, 4 out of 5 of the exporters who participated in the survey stated that they had not yet received clear communications from their shipping lines, giving clarity on how future fuel cost increases, which are expected to accompany the change, would be met. Sulfur 2020 regulatory framework.

Despite the importance of the change, a surprisingly large proportion (33%) of those surveyed by Drewry admitted having little or very little awareness and understanding of the new regulation. (See IMO: Sulfur 2020)

“The current level of uncertainty regarding the impact of the total cost is so great that no one can provide a reliable forecast of the cost of compliance; “The only certainty is that the additional cost will reach billions of dollars globally by 2020,” said Drewry.

According to independent “futures” prices, low sulfur marine fuel prices per ton will be 55% higher than current high sulfur fuels, and Drewry believes that the likely scenario of the “worst case” is that the costs and surcharges for fuel in the global container transport Increase by 55-60% in January 2020.

“The change in the IMO rule with low sulfur content represents a very important change event throughout the industry that is likely to have far-reaching effects on the global shipping industry for many years,” said Philip Damas, Director of Drewry Supply Chain Advisors.

“Given the scale of the additional costs caused by the new regulation and the expectations of the carriers that their price and the fuel loading mechanism with customers must be restructured, it is necessary for carriers to address the transparency concerns expressed by their customers.”

Source WMN
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