The International Maritime Organisation’s (IMO) global emissions regulations come into force in January 2020 and will have a massive effect far outside of shipping, with as much as £220 billion of added costs across global supply chains.
IMO 2020 is the largest ever regulatory change in the oil space, with Goldman Sachs estimating that it will add £40 billion a year in direct shipping costs and, outside of shipping, add as much as £220 billion across global supply chains.
The Low Sulphur Regulation means the 5,200 container vessels currently in operation globally will have to reduce their sulphur emissions by 85%, using liquid natural gas-powered vessels, scrubbers or Very Low Sulphur Fuel Oil.
All methods of IMO2020 compliance incur additional costs for container shipping lines, which they are eager to pass on to shippers, in the form of surcharges.
The clean, low-sulphur compliant fuel currently costs about 50% more than the currently used fuel and is expected to spike massively in the new year, staying high throughout quarters one, two and possibly three.
In accordance with the IMO2020 mandate, Norman Global Logistics are introducing a new charge – EFF2020 – Environment Fuel Fee for our consolidation services.
Current levels expected across the board –
USA to UK LCL = $2.00 w/m Min $2 effective December 2019
UK to USA LCL = $5.00 w/m Min $5 effective December 2019