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SULPHUR CAP TO COST BOXSHIP OWNERS $160 PER TEU

Wednesday, September 26, 2018 

French shipping group company CMA CGM has warned it could cost containership owners US$160/TEU container to comply with the Global Sulphur Cap, IMO’s low sulphur rule which enters into force on 1 January 2020 requiring all shipping companies to reduce their sulphur emissions by 85%.

While CMA CGM favours the use of 0.5% sulphur fuel across its fleet, it has invested in the use of LNG fuel to power the nine newbuild container ships under construction, and has also ordered exhaust gas cleaning systems for several ships.

In  statement posted on its website this week, the company said that “all these measures represent a major additional cost estimated, based on current conditions, at an average of US$160/TEU. This additional cost will be taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis.”

Mathieu Friedberg, CMA CGM’s Senior Vice President Commercial Agencies Network, said: “The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry. In line with its commitments, the Group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges."

Similarly, MSC Mediterranean Shipping Company operating costs are expected to increase as it too prepares for 2020. The company has announced it will introduce a Global Fuel Surcharge as of 1 January 2019.

The new MSC Global Fuel Surcharge will replace existing bunker surcharge mechanisms and will reflect a combination of fuel prices at bunkering ports around the world and specific line costs such as transit times, fuel efficiency and other trade-related factors.

“The cost of the various changes we are making to our fleet and its fuel supply is in excess of two billion dollars per year,” said MSC.

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