Thursday, January 9, 2020

Shipping: Container and Bulk Lines Meeting Resistance To IMO 2020 Fuel Surcharges

We are talking real money here, real enough that shipping lines will go broke if they can't pass the extra fuel costs along.
First up, an example, in this case container mega-carrier CMACGM which had to raise their projected surcharge from $200 to $275/mt according to Ship&Bunker.

From Maritime Executive:
Global Shippers Forum Signals Pushback on IMO2020 Surcharges 
Shippers are signaling that there will be tough negotiations ahead over who will pay for new IMO 2020-compliant low sulfur fuel oil (LSFO). At current pricing, compliant fuel costs roughly twice as much as the heavy fuel oil that most ships could legally burn until last week.

With the IMO 2020 sulfur limit now in effect, the Global Shippers Forum (GSF) has issued advice for importers and exporters facing new demands for surcharges from ocean carriers, which are attempting to pass some or all of the added cost of low-sulfur fuel to their customers in the form of special-purpose surcharges. Maersk, Hapag-Lloyd, CMA CGM and MSC have announced separate IMO 2020 surcharges. Others, like Chinese shipping giant Cosco, are rolling the extra cost of LSFO into their existing bunker surcharge formula....MORE
Back in 2018 the head of Japanese giant Mitsui OSK Line was looking at this exact situation and said:
Shipping: CEO of Third Largest Fleet Says "We're All Going to Go Bust"