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Ocean Carriers Need ‘Significantly Higher’ Surcharges to Offset IMO 2020 Costs: Study

(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.

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