From May 1st, The Two Major Shipping Giants Stopped Levying Low Sulfur Surcharges
From January 2020, IMO MARPOL Annex VI will be implemented, requiring ships to use fuel with a sulfur content of less than 0.5% (less than the previous 3.5%), or install desulfurization equipment to comply. In addition, starting from March 1, ships that are not equipped with desulfurization equipment have not been allowed to carry fuel with sulfur content higher than 0.5%. The implementation of the new regulations has brought a huge increase in operating costs to the global shipping industry.
Because of the high price of low-sulfur oil VLSFO squeezing the profits of shipping companies, shipping giants have announced the collection of low-sulfur oil attachment fees.
However, since the high in January this year, international oil prices have fallen by nearly 70%. On March 30, the West Texas Light Crude Oil (WTI) of the United States fell below US $ 20 / barrel several times during the session, dropping to a low of US $ 19.27 / barrel, the lowest level in 18 years.
Relevant data show that the price difference between marine high-sulfur oil and low-sulfur fuel oil (HSFO and LSFO) has narrowed by two thirds from the beginning of 2020 to the present. In some ports, high-sulfur oil and low-sulfur oil The price difference has even fallen to double digits. ——This has greatly reduced the cost of low-sulfur fuel oil for shipping companies.
To this end, CMA announced in a statement on April 1 that the company levied a low sulfur surcharge (LSS20) from December 1, 2019 to compensate for the fuel-related increase in costs associated with the implementation of IMO 2020 regulations. It will no longer be applicable from May 1st, that is, this fee will be waived after May 1st. At the same time, said: "Considering the current price of VLSFO, we temporarily stop collecting low sulfur surcharges from customers, but there is no guarantee that the price of low sulfur oil will no longer rise, so this surcharge is likely to be levied again in the future."
At the same time, Maersk recently issued a notice: Due to the recent decline in fuel prices, the Maersk EFF level will be set to zero from May 1, 2020. This level will remain until further fuel prices trigger further notice. In December 2019, Maersk introduced Environmental Fuel Fees (EFF) to cope with the increase and fluctuation of fuel-related costs related to the implementation of IMO 2020 regulations. The EFF level is reviewed monthly to reflect the latest low-sulfur fuel development, so that in the initial stage of IMO2020, Maersk and customers can share costs reasonably.
