web statisticswebsite tracking software
bradskelton.com theshippingbloke.com

Monday 2 December 2019

IMO Low Sulphur Regulation Compliance & Freight Increases 1 January 2020

Effective from January 1st, the new IMO (International Maritime Organization) 2020 Low Sulphur Regulation will come into force, requiring all sea-going vessels to comply and reduce sulphur emissions by 85%.

In order to sufficiently comply with the Regulation, sulphur in fuel oil must be reduced from 3.50% to 0.50% in addition to the 0.10% sulphur limit already enforced in Emission Control Areas (ECA).

The objective of this regulation is to reduce the amount of sulphur oxide emissions which is expected to deliver major health and environmental benefits, including improvement of air quality and reducing risks of acidification in the oceans.



Ship owners are responding to this and seeking their compliance with some or all of the following solutions:

- Using liquid natural gas-powered (LNG) vessels

- Installing IMO approved exhaust gas cleaning systems(scrubbers)

- Using compliant fuels with 0.50% or 0.10% sulphur as the main solution

The new IMO 2020 Low Sulphur Regulation is impacting the shipping industry globally, with shipping costs set to increase worldwide. The cost of the Very Low Sulphur Fuel Oil (VLSFO) is expected to be significantly higher than the present High Sulphur Fuel Oil (HSFO).

Projections are that the VLSFO price will be at about US $531/mt in Rotterdam as compared to US $309/mt for HSFO. This equates to a 72% increase in fuel costs.

As a consequence carriers are introducing various sulphur surcharges to recover their higher operational costs. Most are using the BAF (Bunker Adjustment Factor) as the primary mechanism to pass these costs onto shippers.

For RoRo carriers we are seeing Sulphur Recovery Charges from USD 0.23 to USD 35.00 per revenue tonne plus BAF between USD 5.50 to USD 13.00 per revenue tonne.

Container carriers have surcharges per TEU (Twenty foot Equivalent Unit) ranging from USD 60.00 to USD 260.00 depending on the trade lanes concerned and the vessels serving them.

Please feel free to contact me if you would like some specific advice about your own circumstances and shipping contracts.

All for now,

Brad Skelton

5 comments:

  1. Intriguing post. I Have Been pondering about this issue, so much obliged for posting. Really cool post.It "s truly extremely pleasant and Useful post.Thanks nemzetközi fuvar

    ReplyDelete
  2. Thanks a lot for sharing us about this update. Hope you will not get tired on making posts as informative as this. biztosított nemzetközi szállítmányozás

    ReplyDelete
  3. I know your expertise on this. I must say we should have an online discussion on this. Writing only comments will close the discussion straight away! And will restrict the benefits from this information. https://www.beol.hu/pr/gyors-es-szinvonalas-nemzetkozi-szallitmanyozas-az-europ-road-kft-tol-1767157/

    ReplyDelete
  4. This is an incredible rousing article.I am basically satisfied with your great work.You put truly exceptionally accommodating data...  Europa-Road Kft.

    ReplyDelete
  5. This particular is usually apparently essential and moreover outstanding truth along with for sure fair-minded and moreover admittedly useful My business is looking to find in advance designed for this specific useful stuffs… https://idealspy.com/

    ReplyDelete