Dive Brief: 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. Dive Insight: “This year, to say the least, is going to be a turbulent year for the container-shipping industry,” Esben Christensen, global co-leader of the Transportation and Infrastructure practice at AlixPartners and a managing director at the firm, said in a press release announcing the study. Last year, carriers began to announce fuel surcharges related to IMO 2020, much to the chagrin of shippers. Many of the surcharges took effect at the beginning of 2019, a year ahead of the low-sulfur deadline, in order to offset costs of preparation… continue reading
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Source: CTRM Center