Ocean freight global - International Maritime Organization (IMO)’s 2020 Sulphur cap
Whilst the Brent remains firms since the beginning of 2019 between 65$ and 70$ per barrel, carriers are disclosing their intention regarding the implementation of IMO 2020 regulation, which will lead to a 100% switch from Marine Fuel at 3.5% sulfur to Marine fuel at less than 1% sulfur (a new product) or Marine Gas oil.
Whilst there is uncertainty on the supply of the low Sulfur Marine Fuel, carriers are starting to plan Conversion of Fuel Ballast to the new products or are planning dry-docks to install scrubbers. Refuelling with the LSFO 1% or Marine Gas oil will take place already in Q4 2019 and carriers are starting to announce Surcharge or changes in BAF mechanism in Q4 2019.
Considering the high over cost between the two products and a delta in price that might increase in the last part of 2019 (there will be less demand on Marine Fuel Oil 3.5% and huge demand on Marine Gas Oil), carriers will be very firm on the implementation irrespective of the trade situation and customers have to expect an over cost of $150 to $200 / TEU, either through a specific surcharge or through a change of fuel Reference in the Bunker Adjustment Factor (BAF) mechanisms of carriers.
Situation on Transatlantic Trade
The Transatlantic Trade is still under pressure. Carriers are reporting full ships until the end of Q2 2019 and have all announced increased tariffs from April 1, 2019. Besides, congestion still prevails in Canada and volumes to Mexico are still strong. All carriers are firm on charging a Peak Season Surcharge (PSS). Thanks to ongoing partnership with leading carriers, CEVA is able to continually support and provide space for customers.
In the UK, CEVA together with its partners now offer Short Sea Shipping services, giving access to alternative ports across Europe and shipping customers' cargo over the English Channel. Some of the benefits are:
- Avoid predicted queues at Dover Port
- Frequent departures
- Shipping from Europe into a selection of ports including; Tilbury, Felixstowe, Liverpool and Bristol
- Reduction in CO2 emissions
- Reliable, defined service controlled by one manager
- Prices fixed without peak-season surcharges.
For brochure and more details please contact the UK team: SH-NE-UK-info.uk@Cevalogistics.com
Disclaimer - Market and Industry Data
This article includes estimates of the market, industry data, and forecasts that we obtained from publicly available industry publications, independent research, surveys, and forecasts that we believe to be reliable however we have not independently verified any of the data or forecasts from these sources or the economic assumptions relied upon in such sources.