Maersk to change Bunker Adjustment Factor for IMO 2020 sulfur regulation
Maerks Line has announced a new surcharge for the bunker adjustment factor (BAF) which says it will allow customers to predict, plan and track how changes in fuel prices affect the shipping freight rate.
Maersk IMO sulfur regulation: The new surcharge of the Bunker Adjustment Factor (BAF) aims to recover the compliance costs of Maersk Line with the global sulfur limit, which requires the use of fuel with a sulfur content of 0.5% instead of 3 ,5%.
The regulation will bring increases and uncertainty for fuel costs in maritime transport. According to industry estimates, more than 90 percent of the world’s fleet of vessels will depend on compatible fuels when the sulfur rules come into force. This will also be the case of the Maersk Line fleet, despite a recent investment in a limited number of scrubbers.
The BAF replaces Maersk Line’s standard adjustment factor (SBF) surcharge and consists of two key elements; the price of fuel, which is calculated as the average price of fuel in the main ports of supply of fuel worldwide, and a commercial factor that reflects the average consumption of fuel in a given commercial route.
The combination of the two factors gives customers the ability to predict their costs at any fuel price, both before and after OMI 2020. The Maersk Line BAF surcharge will be introduced on January 1, 2019.
Based on the expected differences in the price between the current bunker fuel of 3.5% and the fuel with compliance of 0.5%, external sources estimate that the additional cost for the global container shipping industry could be up to USD 15 billion. Maersk Line expects its additional fuel costs to exceed USD 2 billion.
