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COSCO: Increment of bunker cost for global carriers ‘inevitable’

16 Oct 2018

Chinese shipping firm COSCO Shipping Lines is expecting bunker costs to increase when the 0.50% limit on sulphur in fuel oil on board ships come into effect on 1 January 2020. 

“No matter which measure to take, considerable increment of bunker cost for global carriers is inevitable, and it would be unaffordable for any single carrier alone,” it says.

“In fact, in order to ensure full compliant of the new regulation effective January 1 2020, COSCO Shipping already started to refit some of its vessels and gradually introduce low-sulphur fuel. It means the company’s bunker and related cost composition will change accordingly from 2019.

“In order to ensure the smooth operation of the company and to promote a healthy and sustainable development of the industry, the company is planning to introduce new bunker charge, surcharge or freight adjustment to offset the increase of bunker cost in accordance with the comprehensive factors including fuel consumption in each navigation area, the proportion of high-sulphur and low-sulphur oil products, and ship loading situation.”

Meanwhile, the company says it is now actively preparing itself to meet IMO 2020 regulations.

Possible measures include standard-compliant low-sulphur fuel, the retrofitting of vessels with desulfurisation devices, and consumption of LNG as a marine fuel.

“Undoubtedly, with the in-depth study of sulphur limitation, COSCO Shipping will come up with better solutions in the future,” it states.

“COSCO Shipping will take the initiative to strengthen communication with our customers in order to help them better understand the changing trend of fuel charges, and inform them of the relevant background and the logic behind bunker cost increase.”

Photo credit: COSCO Shipping Lines
Published: 16 October, 2018


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