(Shefali Kapadia – Supply Chain Dive)
Ocean carriers must “impose significantly higher fuel surcharges in 2019 and beyond” in order to maintain margins and cope with costs of low-sulfur regulations from the International Maritime Organization coming in 2020, according to a study by consulting firm AlixPartners.
The firm estimated the container shipping industry needs to offset $10 billion in "incremental" costs starting Jan. 1, 2020. Carriers operating Asia-Europe routes would need to increase surcharges by 40%, and those on Asia-Americas routes would need to increase fees by 33%, to maintain their financial standing, the study estimates.
“If tight supplies of LSFO (low-sulfur fuel oil) trigger higher prices, fuel costs could climb even higher, making the difficult task of cost recovery even more urgent,” AlixPartners said. Click here to read more.