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CMA CGM signals new contract prices due to upcoming IMO 2020 regulation

10 Oct 2019

Worldwide shipping and logistics group CMA CGM Group on Wednesday (9 October) said they will be utilising a mix of three solutions for IMO 2020 compliance.

It will be using liquid natural gas (LNG) powered vessels, advanced air quality systems onboard its vessels, and as the main solution, using compliant fuels with 0.50% or 0.10% sulphur.

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, it says.

“For short-term contracts of validity 3 months or shorter, please be informed that a new monthly charge – Low Sulphur Surcharge (LSS) – will be applied on top of CMA CGM’s ocean freight charges, effective 1 December 2019,” states CMA CGM.

“For long-term contracts of more than 3 months’ validity, please be advised 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. Kindly note that the BAF quantum for reefer cargo will be 20% higher than that of dry cargo for the same container size, with a minimum of USD25/TEU.”

Photo credit: CMA CGM
Published: 10 October, 2019


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