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Cargo owners will start paying fuel surcharges as early as next month

27 November 2019
Logistics News

Shippers and freight forwarders are preparing to start paying fuel surcharges from December 1, which are designed to compensate carriers for higher fuel costs due to the entry into force of new IMO requirements to limit the amount of sulfur impurities in marine fuel from the beginning of next year, TASS reports.

According to the analyst’s forecasts, prices for cleaner fuel with low sulfur content next year will be approximately 34-38% higher than current prices for IFO 380 fuel. Previously, it was assumed that transitional bunker surcharges would be introduced only for spot rates and contracts concluded for less than three months. However, some carriers also want to introduce BAF IMO for customers on annual contracts from December 1, says Drewry.

Philip Damas, director of Drewry Supply Chain Advisors, said Drewry will release its first BAF index on December 4, based on current low-sulfur fuel prices, designed to guide the industry.

Damas noted that in early October, the weighted average price of a low sulfur bunker at major bunkering ports was $ 542 per ton. Based on these figures, he suggested that the value of the bunker index would be in the region of $ 530-550, which is 34-38% higher than the price of IFO 380 fuel in the same ports for the fourth quarter.