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Maersk's new surcharge to recover US$2b costs from 2020 sulphur cap

  • Author:Alex
  • Source:Sunny worldwide logistics
  • Release Date:2018-09-27
Maersk's new surcharge to recover US$2b costs from 2020 sulphur cap

Company Profile:
Sunny Worldwide Logistics is a full-service domestic and international freight forwarder based in China.
Member of WCA ( World Cargo Alliance) , over the last 16 years, we focus on the reliable customer service and competitive transport.

Company Profile: Sunny Worldwide Logistics is a full-service domestic and international freight forwarder based in China. Member of WCA ( World Cargo Alliance) , over the last 16 years, we focus on the reliable customer service and competitive transport.
DANISH shipping giant, Maersk Line, is rolling out a new Bunker Adjustment Factor (BAF) designed to recover increases in fuel related costs from the 2020 0.5 per cent sulphur cap which could exceed US$2 billion for the container shipping company alone.

The new BAF will replace Maersk's existing Standard Bunker Adjustment Factor (SBAF) from January 1, 2019, and will be based on two key elements - the fuel price based on average price at key bunker ports, and the trade factor based on fuel consumption for a particular trade covering variables such as transit time, fuel efficiency and trade imbalances.

Maersk said that by combining the two factors it would give customers full predictability on fuel prices both prior to and after 2020. The new BAF will be charged separately from the freight rate, reports UK's Seatrade Maritime News.

CCO of AP Moller-Maersk, Vincent Clerc, said: "The 2020 sulphur cap is a game changer for the shipping industry. Maersk preparations to comply are well underway and so are our customers' efforts to plan ahead. The new BAF is a simple, fair and predictable mechanism that ensures clarity for our customers in planning their supply chains for this significant shift."

Most of Maersk's fleet will rely on low sulphur fuel to meet the cap, which the company has repeatedly said is its preferred option, although it has made a limited investment in some scrubbers.

Maersk estimates that the additional cost of meeting the sulphur cap could be in excess of $2 billion for the company and it's estimated to cost the industry as a whole some $15 billion.