MSC, CMA CGM Join Maersk in Surcharge Hike

 25 Sep 2018 10.35am

Mediterranean Shipping Company (MSC) and CMA CGM have joined Maersk in announcing that operating costs will increase due to the International Maritime Organisation’s (IMO) 2020 regulations on sulphur emissions.

The new MSC Global Fuel Surcharge will replace existing bunker surcharge mechanisms and will be reflected by a combination of fuel prices at bunkering ports around the world and specific line costs, such as transit times and other trade-related factors.

In a statement, CMA CGM said that all its new measures, which include using scrubbers, 0.5% fuel oil and LNG across its fleet, represent a "major additional cost" of 160 USD / TEU (twenty-foot equivalent unit).

This additional cost will be taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis.

MSC has predicted that the cost of the various changes to the fuel supply it plans to make will be in excess of two billion dollars per year.

It stated: “MSC Mediterranean Shipping Company S.A.’s operating costs are expected to increase significantly as we continue to prepare for the 2020 low-Sulphur fuel regime.

“We are therefore introducing a new Global Fuel Surcharge as of 1 January 2019 in order to help customers plan for the impact of the post-2020 fuel regime.”

To learn more about heavy fuel in shipping, read a Port Technology technical paper

MSC has said it will release further details in due course.

Mathieu Friedberg, Senior Vice President Commercial Agencies Network, CMA CGM, said: "The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry.

"In line with its commitments, the Group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges."

The new regulation, which will require all shipping companies to reduce their Sulphur emissions by 85%, aims to reduce the environmental impact of the industry and significantly improve air quality.

After Maersk made its decision to increase its surcharges, it was criticised by the British International Freight Association.

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  Carriers, MSC, Environment , Global Economy/Trade, Oil, Gas and Chemical Handling, Shipping