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. Mr Kerstens said: “We estimated earlier bunker costs could increase by 15%-20% under IMO 2020. Firat Kayakiran. From 1st January 2020, a new regulation will come into force to reduce air pollution from ships globally. World’s largest container shipping company Maersk Line is planning to introduce a new fuel adjustment surcharge ahead of the 2020 sulphur cap. 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. The regulation will bring increases and uncertainty for fuel costs in maritime transport. Low Sulphur Surcharge – IMO 2020 (LSS) as of December 1st, 2019. 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. Maersk’s surcharges for 2020 (Source: Maersk) The ocean carriers have started introducing the surcharges well ahead of … 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 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. Please enable Cookies and reload the page. 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. As reported by 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 Maersk customers absorb IMO 2020 bunker surcharges, 2021: Europe’s year for shipping’s regulations. 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. 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. 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. 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. Low Sulphur IMO 2020 Regulation For short-term contracts - not subject to floating BAF - … 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%. 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