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Maritime Industry To Be ‘Shaken’ For The First Year Gollowing The IMO2020 Implementation - iContainers

Logistic News - Published on Mon, 24 Jun 2019

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Online freight forwarder iContainers said that the maritime industry will be left ‘shaken’ for at least a year following the implementation of the IMO2020 regulation. The new rule, which will come into effect in under seven months, requires sulfur oxide emissions from maritime vessels to be reduced from the current 3.5 percent m/m to 0.5 percent m/m. Because of the costly compliance process, which is estimated to cost between USD 10 and USD 15 billion annually, carriers and shipowners are shifting a big part of this increase in operational and fuel costs to its customers, the shippers.

Aliona Yurlova, expert in international business development at iContainers, said that “The immediate impact will be much higher surcharges. More specifically, expect the Bunker Adjustment Factor to be significantly higher in the first 12 to 18 months. There is also an expected 15 to 20 percent increase in rates and up to a 10 percent decrease in capacity, which will leave the maritime market quite shaken for at least the initial year.”

Despite it being one of the most important regulations in maritime history and one that will have far-ranging impacts across industries, many shippers remain unaware and unprepared to deal with its consequences.

From higher rates volatility and additional surcharges to higher risks of cargo getting rolled at origin and a severe capacity shortage, these are just some of the expected aftermath of IMO2020. Most shippers, however, seem unsuspecting of the potential complications.

Source :

Posted By : Mohan Sharma on Mon, 24 Jun 2019
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