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

17 Sep 2019
Trucking executives aren’t as worried about the impact of the IMO 2020 low-sulfur rule as they are about pending US regulatory changes that will more directly affect the sector.
17 Sep 2019
Maersk has “seen an understanding from the vast majority of customers” that they’ll need to pay higher fuel surcharges due to the IMO low-sulfur mandate, which will cost the container shipping industry $10 billion to $15.7 billion more annually, according to various estimates
10 Sep 2019
Shippers on the Asia-Europe trades are starting to see how container shipping’s switch to low-sulfur fuel will impact their freight rates.
03 Sep 2019
Carriers are beginning to notify customers of low-sulfur fuel surcharges effective Oct. 1, but customers look at them only as preliminary estimates and expect adjustments this fall.
03 Sep 2019
Far more widespread demand for low-sulfur fuel will be required before prices stabilize enough for shippers to factor in the impact on Asia-Europe contracted rate levels.
02 Sep 2019
China’s largest carrier has expanded its Asia network with subsidiary OOCL to capture volume displaced by the US-China trade war.

Commentary

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

More Commentary