Low-Sulfur Fuel Rule

Low-Sulfur Fuel Rule

Starting Jan. 1, 2020, all ships must burn fuel with a content of 0.5 percent sulfur to comply with an International Maritime Organization amendment to the International Convention for the Prevention of Pollution from Ships (MARPOL) known as Regulation 14. 

As a result, a host of challenges face international container shipping by sea. These include concerns over higher costs, international compliance, and the availability of low-sulfur fuel at key international bunkering hubs such as Rotterdam and Singapore. 

Carriers have three paths to compliance, including the use of low-sulfur fuel, installing scrubbers and burning regular bunker fuel, or transitioning to liquefied natural gas to power vessels.

News & Analysis

Return of scrubber-fitted ships to test carrier capacity plans
15 Jan 2020
The fleet-to-orderbook ratio is at its lowest in nearly a decade as carriers maintain a tight grip on capacity, aided by scrubber retrofitting and scrapping.
06 Jan 2020
Spot rate hikes in the major container trades in early 2020 are only slightly higher than the historical average for this time of year, and as such, shippers should brace themselves for further increases.
06 Jan 2020
The impact of steadily rising low-sulfur fuel prices on carriers is being partly offset by a strong increase in the Asia-Europe spot market, but the traditional slack season is just a couple of weeks away.
Trans-Pac carriers recouping IMO surcharges, but scale unclear
03 Jan 2020
Recent quotes by carriers on their surcharges for more expensive low-sulfur fuel oil are confusing shippers and causing suspicion carriers are attempting to make unreasonable profits from the global LSFO mandate that took effect Wednesday.
13 Dec 2019
Drewry's Head of Research Products Martin Dixon on fleet and rate projections for breakbulk and project cargo, uncertainty around tariffs, oil prices, and the shipping cost implications for cargo owners of the IMO 2020 low-sulfur fuel regulation.
Alphaliner raises alarm over possible overcharging on low-sulfur fees
11 Dec 2019
Carriers have struggled to lift spot rates on the Asia-Europe trade, and the wide variations in low-sulfur surcharge levels have an analyst asking questions.

Commentary

Negotiations for 2019-2020 shipping contracts will be difficult on a number of fronts.

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