Sulphur cap: CMA CGM customers to pay additional $160 per TEU


Container line CMA CGM says the 0.5% sulphur cap in 2020 will cost an additional average of $160 per TEU, and will be charged to customers through fuel charges.

Although CMA CGM has led the way with the order for nine 22,000 TEU LNG-powered newbuilds it plans to primarily comply with the cap 1 January 2020 through the use of low sulphur fuels. It added that it would be ordering scrubbers for “several ships”.

Based on current conditions the world’s third largest container line said that it would result in additional costs of $160 per TEU on average.

“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,” said Mathieu Friedberg, senior vice president Commercial Agencies Network.

The additional costs would be passed on to customers through the application or adjustment to fuel surcharges on trade-by-trade basis.

Last week Maersk Line announced plans for a new bunker adjustment factor from 1 January 2019 to pass on the additional costs of the sulphur cap, which has drawn the ire of shippers and forwarders.

However, it looks likely most lines will try and pass on the additional cost to customers and senior officials from Ocean Network Express, Orient Overseas Container Line (OOCL) and APL, a unit of CMA CGM, said shippers would have to pay.

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