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Study: IMO 2020 could cost global box shipping sector $10 billion

05 Mar 2019

A number of factors, including IMO 2020 regulations, trade disputes resulting in new tariffs, and the UK's impending exit from the EU, could rock the shipping industry throughout 2019, finds a study from research firm AlixPartners.

The ‘2019 Global Container Shipping Outlook’ study pointed out IMO 2020 regulations could cost the container shipping business as much as US $10 billion globally – and that cost could increase significantly in 2020.

“2018 was a turbulent year for the container shipping industry, but it might have been only a warm-up for 2019,” it notes.

“Market stakeholders must take certain measures and be prepared to respond rapidly as these factors unfold.”

In summary, the study found forwarders and third-party logistics (3PL) providers will have to navigate shifting currents in their industry as independent forwarders may find themselves sidelined by carriers intending on supporting their own captive forwarding and logistics units.

“Every player in the sector will have to be vigilant to avoid being stuck with the bill for fuel cost recovery prompted by the implementation of IMO 2020,” it states.

Shippers, meanwhile, can expect pressure from carriers seeking to recover their added fuel costs and improve profitability.

“Shippers along the eastbound transpacific route may benefit by holding off from locking in contract rates until volumes along the route subside following inventory buildups in anticipation of tariffs,” it explains.

“Shippers that have in the past relied on forwarders to afford access to multiple carriers should keep careful watch of where those forwarders’ allegiances lie, given the number of forwarders that are now captives of one carrier or another.”

The full study ’2019 Global Container Shipping Outlook’ can be found here.

Published: 5 March, 2019
 

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