Analysts predict that the impact of IMO 2020 will mean slower ships and more transhipment. This would be a further blow to shippers who also face additional costs to compensate carriers for using cleaner fuel from 1 January. Shippers may dislike surcharges, but they universally hate transhipment, as it introduces another level of risk to the supply chain. Ocean carriers face a challenging period when they need to obtain acceptance from their customers to adopt their fuel surcharge mechanisms in preparation for the introduction of the IMO’s 2020 0.5% sulphur cap on the maritime sector. Drewry warns that if there is a failure to pass on a higher than historical average 50% success rate for fuel increases, then the substantial extra cost of low-sulphur fuel “could be ruinous for some lines, many of which are still operating with highly distressed balance sheets”. Source: https://gcaptain.com/
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This would be a further blow to shippers who also face additional costs to compensate carriers for using cleaner fuel from 1 January.
Shippers may dislike surcharges, but they universally hate transhipment, as it introduces another level of risk to the supply chain.
Ocean carriers face a challenging period when they need to obtain acceptance from their customers to adopt their fuel surcharge mechanisms in preparation for the introduction of the IMO’s 2020 0.5% sulphur cap on the maritime sector.
Drewry warns that if there is a failure to pass on a higher than historical average 50% success rate for fuel increases, then the substantial extra cost of low-sulphur fuel “could be ruinous for some lines, many of which are still operating with highly distressed balance sheets”.
Source: https://gcaptain.com/