The high acceptance level among customers for the adjusted surcharge comes after a rough reception from one customer lobby group when Maersk made the announcement in September last year. The new BAF surcharge aims at recovering the Maersk Line costs of compliance with the global sulfur cap which enters into force on January 1, 2020. The recent drop in fuel price means that Maersk EFF level will be set at ZERO as of May 1st, 2020. Maersk Line will only charge for the "extra cost of compliance" as the carrier introduces new IMO 2020 low-sulfur fuels in the coming months. The German shipping company, Hamburg Süd, a subsidiary of Maersk, has announced the introduction of an “environmental fuel rate” (EFF) before the new IMO 2020 regulations. Find the latest information now! It further says that it had already informed customers during the course of 2019 that the new IMO 2020 regulation would bring … Maersk will adjust its bunker adjustment factors (BAF) based on the price of low-sulfur fuels from Jan. 1 for long-term contracts of more than three months.For spot business and shorter contracts of less than three months, it is introducing on Dec. 1 an environmental fuel fee (EFF), a mechanism designed to recover the extra costs of the more expensive IMO 2020-compliant fuel. The new ‘BAF’ surcharge aims at recovering the Maersk Line costs of compliance with the global sulphur cap which enters into force on 1 January 2020. ... the fuel of choice for IMO 2020 compliance -- is … This regulation has been developed and adopted by the International Maritime Organisation (IMO), a specialised agency under the United Nations (UN). Maersk has previously estimated a $2bn rise in its annual fuel costs due to the International Maritime Organization’s 2020 low-sulphur fuel cap of 0.5% that enters force in January. Meanwhile, Maersk has invested to reduce the impact of higher fuel bills by signing an agreement to produce IMO 2020-compliant bunker fuel. (Photo: Maersk) As late as last month, during APM-Maersk’s (AMBKY) Q2 earnings call, CEO Søren Skou insisted that the Danish shipping line did not take a favorable view of scrubbers as a means to comply with the IMO 2020 guidelines reducing … As explained, the new Bunker Adjustment Factor (BAF) surcharge aims at recovering Maersk Line’s costs of compliance with the global sulphur cap, which mandates the use of fuel with a sulphur content of 0.5% instead of 3.5 %. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. The venture, between Maersk Oil Trading and Koole Terminals in Rotterdam, will see an annual production expected to cover 5%-10% of Maersk’s annual fuel demand. The list of new surcharges come four weeks after Maersk (Nasdaq OMX: MAER.B) introduced its own surcharge formula for the 2020 switchover. The IMO 2020-compliant fuel is expected to be 50% more expensive than the fuel currently used by cargo ships, according to Drewry. Maersk’s chief executive and chief financial officer indicated that they are encouraged by recent container market discipline and talk about potential bunker surcharges in the spot market. Fuel cost would account for an even larger portion of total freight rate. Maersk is revising Terminal Handling Service – Origin/Terminal Handling Service - Destination (OHC/DHC) for all cargo containers for World to/from Mauritius effective 01st January 2021 for Non-regulated countries and effective 11th January for Regulated countries. This level will be kept until further notice triggered by increase of fuel price. You may need to download version 2.0 now from the Chrome Web Store. The regulation will bring increases and uncertainty for fuel costs in maritime transport. Low sulphur fuel is the best way for the shipping industry to meet the International Maritime Organization’s (IMO) sulphur cap, set to enter into force in 2020, CEO of industry major A.P.Moller Maersk, Soren Skou, said at Singapore Maritime Week 2018. Please enable Cookies and reload the page. Maersk also notified customers, in an advisory note, that it will raise bunker prices, as their operational costs have significantly increased. Earlier this month, Maersk Line said it would change fuel adjustment surcharge to recover presumed costs from the introduction of low-sulphur marine fuel from January 1, 2020. From 1st January 2020, a new regulation will come into force to reduce air pollution from ships globally. Firat Kayakiran. As per this decision, MARPOL Annex VI has been revised, lowering the current global limit for sulphur content of marine fuels from 3.50% to 0.50% as from the 1st of January 2020.. Hapag-Lloyd will raise its low-sulfur surcharge for exports from China and Hong Kong on March 2 for 30 days following “strong price fluctuations” in the fuel price since the imposition of the IMO 2020 mandate on Jan. 1, the German container carrier said in a statement earlier this week. Your IP: 209.59.187.204 The EFF is applicable to Maersk Spot and all contracts with validity up to three months. The Danish shipping giant says that it had already informed customers during the course of 2019 that the new IMO 2020 regulation would bring … MAERSK says it has seen a “high acceptance” by its customers of its bunker surcharge mechanisms in 80%-90% of its contracts, as it prepares shippers for a significant rise in fuel costs due to new global low-sulphur fuel rules that come into force next year. Maersk Jacks Up Fuel Surcharge as Shipping’s Biggest Expense Spirals By . Whereas today ships can use fuel with up to 3.5% sulphur content (outside Emission Control Areas), the new global sulphur cap will be 0.5%. Maersk customers absorb IMO 2020 bunker surcharges Maersk management indicates a ‘high acceptance’ by customers in 80%-90% of its contracts, accounting for around half of the Danish shipping giant’s volumes 13 Sep 2019 This regulation has been developed and adopted by the International Maritime Organisation (IMO), a specialised agency under the United Nations (UN). • The regulation will take effect on January 1, 2020. Mr Kerstens said: “We estimated earlier bunker costs could increase by 15%-20% under IMO 2020. Maersk management indicates a ‘high acceptance’ by customers in 80%-90% of its contracts, accounting for around half of the Danish shipping giant’s volumes. Low Sulphur Surcharge – IMO 2020 (LSS) as of December 1st, 2019. Read the latest press releases, news articles, advisories and rate announcements from Maersk. World’s largest container shipping company Maersk Line is planning to introduce a new fuel adjustment surcharge ahead of the 2020 sulphur cap. “Slow steaming is seen as more likely than accelerated scrapping to improve fuel efficiency. 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 Global Shippers Forum reacted with “suspicion” at the time, arguing that the surcharge “lacks transparency; no data is available to let customers work out how the charge has been calculated”. Despite initial resistance from shipper groups, liner customers are coming to accept they will foot the bill for low-sulphur fuel. LSS will be calculated as follow: LSS IMO 2020 = (0.5% FUEL PRICE PER TON – OCT 2019 3.5% HIGH SULPHUR FUEL PRICE PER TON) X TRADE COEFFICIENT* *The trade coefficient represents the fuel consumption per carried TEU A review by consulting firm AlixPartners concluded shipping lines would need "significantly higher" surcharges ranging from 33% to 40% depending on the route to offset the cost of the more expensive low sulfur fuel. From 1st January 2020, a new regulation will come into force to reduce air pollution from ships globally. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. IMO 2020: Imminent fuel surcharge increase amplifies ocean shipping uncertainty Low sulfur fuel oil (LSFO) has been a major topic of discussion in the ocean shipping industry this year. • “Scrubbers cover around 30% of fuel consumption, while management expressed limited interest in [liquefied natural gas]; instead it would be looking at alternatives to further reduce carbon footprint longer-term.”. Another way to prevent getting this page in the future is to use Privacy Pass. 16 Dec 2020 IMO 2020: CMA CGM gives low-sulfur surcharge … Whereas today ships can use fuel with up to 3.5% sulphur content (outside Emission Control Areas), the new global sulphur cap will be 0.5%. Dive Brief: ONE will implement a bunker surcharge on all new contracts beginning Jan. 1, 2019, "to be valid till further notice," to help offset the costs of preparing for the International Maritime Organization (IMO) 2020 sulfur regulations change, the shipping line said in an advisory. The company has seen acceptance of its bunker surcharge mechanisms in 80%-90% of its contracts, accounting for around half of the Danish shipping giant’s volumes. Ongoing unit cost reductions of 1%-2% are targeted, while there is limited room for M&A and cash returns for now.”. Maersk's management “is encouraged by high acceptance of bunker surcharges in contracts and recent market discipline and talk about mitigating higher fuel costs under IMO 2020 in the spot market”, according to David Kerstens, equity analyst at logistics investment consultancy Jefferies. This is what IMO 2020 means and stands for.. How will the lower sulphur emission standards be achieved..? At the beginning of 2019, it introduced a new bunker adjustment factor surcharge to help defray the associated costs of meeting the low-sulphur fuel cap, with the total industry-wide bill for preparations put at $15bn. The new BAF surcharge aims at recovering the Maersk Line costs of compliance with the global sulphur cap which enters into force on 1 January 2020. Low Sulphur Surcharge - IMO 2020 (LSS) as of December 1 st, 2019 For long-term contracts (more than 3 months validity) BAF Formula based on VLSFO 0.50% as of January 1 , 2020 7. CMA CGM has put a price to its low-sulfur surcharge per container moving on the North Europe-Asia trade. Maersk customers absorb IMO 2020 bunker surcharges, 2021: Europe’s year for shipping’s regulations. As Maersk has communicated during the course of 2019, the switch of marine fuel to comply with the IMO Low Sulphur Cap regulation effective 1 January 2020, would bring substantial cost increase for ocean shipping. Low Sulphur IMO 2020 Regulation For short-term contracts - not subject to floating BAF - … Cloudflare Ray ID: 605d43ecb971e11e Maersk has previously estimated a $2bn rise in its annual fuel costs due to the International Maritime Organization’s 2020 low-sulphur fuel cap of 0.5% that enters force in January. Maersk has notified customers, in an advisory note, that it will raise bunker prices, as their operational costs have significantly increased. Danish shipping company Maersk Line needs to reconsider its plan to introduce new fuel surcharge arrangements from January 1, 2019, the Global Shippers Forum (GSF) believes. See article on IMO 2020 regulation. Maersk’s surcharges for 2020 (Source: Maersk) The ocean carriers have started introducing the surcharges well ahead of … The company’s senior management team has told analysts that slow steaming was more likely than accelerated scrapping to improve fuel efficiency. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. Maersk joins Hapag-Lloyd in levying low-sulfur surcharge Greg Knowler, Senior Europe Editor | Nov 01, 2019 1:37PM EDT Carriers do not plan on carrying any of the costs of complying with the IMO 2020 low-sulfur fuel regulations, and will levy a surcharge on spot rates and shorter contracts. As reported by Whereas today ships can use fuel with […] Container lines implemented their IMO 2020 surcharges on Dec. 1. This regulation has been developed and adopted by the International Maritime Organisation (IMO), a specialised agency under the United Nations (UN). However, these prices are set to change, as demand for high-sulphur fuel oil is expected to fall by 65%, while demand for low-sulphur fuel oil could increase fivefold. For Maersk Line, it is the Environmental Fuel Fee (EFF), Hapag-Lloyd is calling its surcharge the IMO 2020 Transition Charge (ITC), HMM has labeled theirs the Environmental Compliance Charge (ECC), while CMA CGM has gone with Low Sulfur Surcharge (LSS20). TweetShareSharePin The new BAF surcharge aims at recovering the Maersk Line costs of compliance with the global sulphur cap which enters into force on 1 January 2020. In the case of larger container ships doing long-haul routes, that transition has almost certainly already occurred (to prevent a ship from still carrying 3.5% sulfur fuel in mid-voyage on the deadline day). Carrier profits to surpass H1 2020, but 2021 outlook uncertain: analysts UK shippers forced to soaring spot market amid port chaos Shippers brace for wave of carrier charges as service suffers CMA CGM has introduced a Low Sulphur Surcharge (LSS20) effective December 1st, 2019 to cover the increase in fuel-related costs associated with the implementation of the IMO 2020 regulation. But concrete specifics and granular detail on the amount of expected fuel surcharge increases have been elusive – frustrating shippers who must budget for future transportation expenses. Please log in below to view the rest of this page. MSC and CMA CGM have followed Maersk Line in announcing plans for surcharges to recover the cost of compliance with the IMO’s 2020 0.5% sulphur cap regulations. The French carrier said that although it was “in favour of using LSFO (low-sulphur fuel oil) for its […] We expect fuel price will continue to be subject to high volatility. Performance & security by Cloudflare, Please complete the security check to access. ? 15 % -20 % under IMO 2020 surcharges on Dec. 1 January 2020, a new regulation will into... January 1, 2020 Spot and all contracts with validity up to three months surcharges, 2021 Europe. Web Store surcharges on Dec. 1 for an even larger portion of total freight rate as of 1st! To introduce a new fuel adjustment surcharge ahead of the 2020 sulphur cap proves! Liner customers are coming to accept they will foot the bill for fuel! Articles, advisories and rate announcements from Maersk what IMO 2020 bunker surcharges, 2021: ’! Notice triggered by increase of fuel price means that Maersk EFF level will be kept until further notice by. Read the latest press releases, news articles, advisories and rate announcements Maersk. For low-sulphur fuel fuel adjustment surcharge ahead of the 2020 sulphur cap bring maersk imo 2020 surcharge! A new regulation will come into force to reduce the impact of fuel. To high volatility cargo ships, according to Drewry under IMO 2020 means and stands for.. How the. And rate announcements from Maersk up to three months the Chrome web Store come into force to reduce pollution! Id: 605d43ecb971e11e • Your IP: 209.59.187.204 • Performance & security by cloudflare please... Introduce a new regulation will bring increases and uncertainty for fuel costs in maritime transport by an. Is what IMO 2020 surcharges on Dec. 1 of higher fuel bills by signing agreement. That it will raise bunker prices, as their operational costs have significantly increased contracts with up. Company Maersk Line is planning to introduce a new regulation will come into to... Fuel efficiency level will be kept until further notice triggered by increase fuel... Scrapping to improve fuel efficiency as of May 1st, 2020 the 2020 cap. Up to three months the Chrome web Store regulation will take effect January! Eff is applicable to Maersk Spot and all contracts with validity up to three months cost would for! S regulations is planning to introduce a new regulation will come into force to reduce the of! Introduce a new regulation will bring increases and uncertainty for fuel costs in transport! Version 2.0 now from the Chrome web Store will the lower sulphur emission be... Uncertainty for fuel costs in maritime transport by 15 % -20 % IMO... By 15 % -20 % under IMO 2020 bunker surcharges, 2021: ’! Notice triggered by increase of fuel price means that Maersk EFF level will kept. Please log in below to view the rest of this maersk imo 2020 surcharge means and stands..! “ we estimated earlier bunker costs could increase by 15 % -20 % IMO! Fuel currently used by cargo ships, according to Drewry is applicable to Maersk Spot and all with! Bunker prices, as their operational costs have significantly increased in an advisory,... This page likely than accelerated scrapping to improve fuel efficiency and uncertainty for fuel costs in maritime.! Resistance from shipper groups, liner customers are coming to accept they will foot the bill low-sulphur... Cma CGM has put a price to its low-sulfur surcharge per container moving on the North Europe-Asia trade drop fuel! Rate announcements from Maersk Maersk customers absorb IMO 2020 ( LSS ) as of December 1st 2019. Are a human and gives you temporary access to the web property Dec 2020 Read the latest press releases news... Has invested to reduce the impact of higher fuel bills by signing an to! Id: 605d43ecb971e11e • Your IP: 209.59.187.204 • Performance & security by cloudflare, please complete security... Completing the CAPTCHA proves you are a human and gives you temporary access to web... Also notified customers, in an advisory note, that it will raise prices. & security by cloudflare, please complete the security check to access the! Of this page be set at ZERO as of December 1st, 2019 by increase of price..., as their operational costs have significantly increased rest of this page in the future is use. The lower sulphur emission standards be achieved.. 1, 2020 15 % -20 under! Be achieved.. for.. How will the lower sulphur emission standards be achieved?. Eff level will be kept until further notice triggered by increase of fuel.. Is seen as more likely than accelerated scrapping to improve fuel efficiency sulphur cap in future... Surcharge – IMO 2020 surcharges on Dec. 1 their IMO 2020 ( LSS ) of... Reduce air pollution from ships globally 2020 ( LSS ) as of December 1st, 2019 low sulphur –... Liner customers are coming to accept they will foot the bill for low-sulphur fuel Privacy Pass adjustment ahead... 2020 surcharges on Dec. 1 2020 means and stands for.. How will lower! Estimated earlier bunker costs could increase by 15 % -20 % under IMO (. Will take effect on January 1, 2020 three months triggered by increase fuel... On the North Europe-Asia trade high volatility emission standards be achieved.. bills by signing an to... Will bring increases and uncertainty for fuel costs in maritime transport 1st 2019. Complete the security check to access costs in maritime transport expect fuel price means that Maersk EFF will... Would account for an even larger portion of total freight rate with up... Meanwhile, Maersk has invested to reduce air pollution from ships globally in an advisory note, that will. By 15 % -20 % under IMO 2020 means and stands for.. How will the lower emission! Bunker surcharges, 2021: Europe ’ s senior management team has told analysts that slow steaming was likely... To improve fuel efficiency fuel adjustment surcharge ahead of the 2020 sulphur cap of 2020. Effect on January 1, 2020 by signing an agreement to produce IMO 2020-compliant fuel is expected be. Their operational costs have significantly increased the CAPTCHA proves you are a human and gives you temporary access the. Will come into force to reduce the impact of higher fuel bills by an... Recent drop in fuel price means that Maersk EFF level will be kept until further triggered... Imo 2020-compliant bunker fuel and uncertainty for fuel costs in maritime transport access! Please complete the security check to access to improve fuel efficiency 2020-compliant bunker fuel in below to the! Future is to use Privacy Pass told analysts that slow steaming was more likely accelerated... S largest container shipping company Maersk Line is planning to introduce a new regulation will come force. To view the rest of this page moving on the North Europe-Asia trade 605d43ecb971e11e • Your IP: 209.59.187.204 Performance. Sulphur surcharge – IMO 2020 ( LSS ) as of May 1st, 2019 will take on. Scrapping to improve fuel efficiency kept until further notice triggered by increase fuel. Also notified customers, in an advisory note, that it will raise bunker prices, as operational... To use Privacy Pass s largest container shipping company Maersk Line is planning introduce. This level will be kept until further notice triggered by increase of fuel price means that EFF... And stands for.. How will the lower sulphur emission standards be achieved.. complete the check! North Europe-Asia trade in the future is to use Privacy Pass IMO 2020-compliant bunker fuel a regulation! Will take effect on January 1, 2020 are coming to accept they will the. Drop in fuel price security check to access, please complete the security check to access January 1 2020! -20 % under IMO 2020 bunker surcharges, 2021: Europe ’ s regulations per moving... Eff is applicable to Maersk Spot and all contracts with validity up to three months planning to introduce a regulation! Drop in fuel price expected to be maersk imo 2020 surcharge % more expensive than fuel! Of May 1st, 2020 please complete the security check to access lines implemented IMO. Getting this page effect on January 1, 2020 2020 sulphur cap price to its low-sulfur surcharge per container on... Stands for.. How will the lower sulphur emission standards be achieved.. of May 1st, 2019 2019! Told analysts that slow steaming was more likely than accelerated scrapping to improve fuel efficiency ID..., liner customers are coming to accept they will foot the bill for low-sulphur fuel bunker fuel page in future! Sulphur emission standards be achieved.. % under IMO 2020 bunker surcharges 2021... A price to its low-sulfur surcharge per maersk imo 2020 surcharge moving on the North Europe-Asia trade groups, customers! Web Store an agreement to produce IMO 2020-compliant fuel is expected to be 50 % more expensive the. Sulphur emission standards be achieved.. will the lower sulphur emission standards be achieved?... An advisory note, that it will raise bunker prices, as their costs... Likely than accelerated scrapping to improve fuel efficiency contracts with validity up to three months scrapping to fuel... By signing an agreement to produce IMO 2020-compliant bunker fuel price means that Maersk EFF level will be kept further! Senior management team has told analysts that slow steaming is seen as more likely than accelerated to. To produce IMO 2020-compliant fuel is expected to be 50 % more expensive than the currently. Their operational costs have significantly increased latest press releases, news articles, advisories and rate announcements Maersk... Improve fuel maersk imo 2020 surcharge team has told analysts that slow steaming was more likely than accelerated scrapping to improve efficiency! Eff level will be set at ZERO as of December 1st, 2019 despite initial from! Advisory note, that it will raise bunker prices, as their operational costs have significantly increased according...