Low-Sulfur Fuel in Ocean Shipping: Are You Preparing?

New Low-Sulfur Fuel Mandate in Ocean Shipping

In a recent Talking Logistics guest commentary, Mollie Bailey from Transplace writes, “On January 1, 2020, a new global regulation will be put into effect in the effort to reduce air pollution from container ships. Currently, most vessels can use bunker fuel (the maritime fuel that runs large container ships) with up to 3.5% sulfur content outside current emission control areas, or ECAs — but the new global sulfur cap will become 0.5% in 2020, per the International Maritime Organization (IMO).”

Last week in the Wall Street Journal, Costas Paris reported that “the emissions mandate taking effect at the start of 2020 will affect at least 60,000 vessels and cost the industry up to $50 billion, according to shipping executives’ estimates. The expected burden has triggered a noisy debate about the added costs, as well as warnings over the quality and availability of the new fuels—and calls to delay the rule.”

With just 8 months to go before the mandate takes effect, have you started to analyze the potential impact of this change on your shipping costs? What actions might you take in response?

For related commentary, see Changes to International Fuel Surcharges Coming in 2020