Shipping companies plan to introduce additional fuel surcharges to comply with CO2 regulations. This can lead to increased ocean freight costs. This as a result of global sulphur requirements, an initiative of the International Maritime Organization (IMO).

Higher environmental requirements force shipping companies to take measures

Starting January 2020, the maximum permitted sulphur emissions will be reduced from 3.50% to 0.50%. This means that from 2020 on shipping companies will have to sail on a more expensive low-sulphur fuel in order to meet the requirements. There are other ways in which this new standard can be met, like switching to exhaust gas washing installations such as scrubbers or switching to cleaner alternative fuels such as LNG. However, this is not (yet) an option for many shipping companies, because these alternatives are not always technically possible or require substantial investments. The low-sulphur fuel thus seems the most obvious solution, but this fuel is 70% to 100% more expensive than the current high-sulphur fuel.

Shipping will become more expensive due to additional fuel surcharge

To cover the higher fuel costs, shipping companies will implement an additional fuel surcharge. This is a surcharge on top of the standard ocean freight costs, which is ultimately passed on to shippers. The new regulations will apply from 2020, but Maersk wants to introduce the additional fuel surcharge in 2019. The exact costs are not known yet.

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scrubbers allport netherlands
Liveshot of the transport of a scrubber for a customer well known in the cruise business, organised by Allport Netherlands.