French shipping company CMA CGM Group has confirmed that it will comply with the IMO’s 2020 global sulphur cap by using a combination of liquefied natural gas (LNG), 0.5 per cent or 0.1 per cent sulphur fuel, and advanced air quality systems.
The new IMO 2020 low sulphur regulation impacts the global shipping industry and shipping costs are set to increase worldwide. As the cost of the Very Low Sulphur Fuel Oil (VLSFO) is expected to be significantly higher than the present High Sulphur Fuel Oil (HSFO), CMA CGM will implement a new price reference for its short-term and long-term contracts.
For short-term contracts of validity 3 months or shorter, a new monthly charge – Low Sulphur Surcharge (LSS) – will be applied on top of CMA CGM’s ocean freight charges, effective 1 December 2019.
For long-term contracts of more than 3 months’ validity, CMA CGM says that VLSFO will replace HSFO as the price reference for the quarterly Bunker Adjustment Factor (BAF), effective 1 January 2020. The BAF is applied on top of the ocean freight charges and will still be revised on a quarterly basis with a one-month notice. The BAF quantum for reefer cargo will be 20 per cent higher than that of dry cargo for the same container size, with a minimum of USD25/TEU, the company has confirmed.
Further information can be found on CMA CGM’s IMO 2020 video http://www.cma-cgm.com/about/sustainability