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Sulphur cap set to raise shipping costs

Maersk Line is to introduce a new bunker adjustment factor (BAF) surcharge ahead of the global sulphur cap on marine emissions which enters into force on January 1, 2020.


 

The Danish-headquartered carrier said it would help it recover the cost of compliance with the new International Maritime Organisation (IMO) regulation, which will cut allowable sulphur content from 3.5 percent to 0.5 percent.

Describing the sulphur cap as “a game changer”, chief commercial officer, AP MøllerMærsk, Vincent Clerc, said: “Maersk preparations to comply are well underway and so are our customers' efforts to plan ahead. The new BAF is a simple, fair and predictable mechanism that ensures clarity for our customers in planning their supply chains for this significant shift.”

According to industry estimates, over 90 percent of the global vessel fleet will be relying on compliant fuels when the sulphur rules come into force on January 1, 2020. This will also be the case for the Maersk Line fleet, despite a recent investment in a limited number of scrubbers.

The added cost to the global container shipping industry to comply could be up to USD15 billion. While Maersk Line expects its own extra fuel costs could exceed USD2 billion.

The BAF replaces Maersk Line's current Standard Bunker Adjustment Factor (SBF) surcharge and consists of two key elements; the fuel price which is calculated as the average fuel price in key bunkering ports around the world, and a trade factor that reflects the average fuel consumption on a given trade lane as a result of variables such as transit time, fuel efficiency and trade imbalances between head haul and backhaul legs.

maersk.com

 

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