Carriers and Shippers Prepare For New International Maritime Organization 2020 Mandate

This article has been reprinted from the Sept. 5 USDA Grain Transportation Report.

Ocean container carriers and shippers are preparing for increased fuel costs in the fourth quarter, as carriers begin using low-sulfur bunker fuel required by the International Maritime Organization (IMO) 2020 mandate effective January 1, 2020.

To meet compliance by the beginning of the year, carriers will begin using the low-sulfur fuel and charging additional surcharges as of October 1.

The Journal of Commerce recently reported surcharges ranging from $164 to $375 per 40ft container for shipments through west coast ports and $276 to $625 for shipments through east coast ports.

The article further reports the price of the low sulfur fuel is currently more than 30 percent more than the heavy fuel oil currently used.

“But shippers believe prices will change rapidly amid more widespread demand for lowsulfur fuel later in the fourth quarter….”