IMO 2020

IMO 2020

IMO 2020 – How regulation may result in higher charges

On 1st January 2020 the upcoming IMO 2020 low-sulphur shipping rules will come into force. This means that shipping lines must reduce the emission of sulphur oxides by 85% from current levels.

In order to comply shipping lines must either:

Purchase cleaner low-sulphur fuel;

Install exhaust gas cleaning systems, known as “Scrubbers”;

Switch to Liquefied Natural Gas (LNG).

Each of these options result in substantially higher costs to the shipping lines. It is currently unclear as to the amount of the increases however each shipping line will have its own calculation and the surcharge will come into force for shipments from 1st December 2019 in most cases.

Shippers do not need to make any drastic changes to their process but do need to be aware of the price hikes expected in the coming months. Freight Agency Ltd believe there will be no avoiding the price increases however please be assured we are monitoring the situation and will endeavour to keep you updated of the situation.