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Get ready for higher ocean prices

Freighter refueling

Global shippers, ocean carriers and freight forwarders are expecting higher fuel prices in 2020, with BAF (Bunker Adjustment Factor) increases as a result of the new low-sulphur shipping fuel “IMO 2020” rules. However, the level of impact this will have on ocean freight rates is still unknown as the available information on the costs of new low-sulphur fuel is both limited and confusing.

Early indications are this new fuel could cost 30% more than current shipping fuels, with container shipping analyst and data expert Drewry predicting an initial dramatic spike followed by price volatility throughout 2020, before falling in 2021.

Due to this uncertainty and the fact that there is no established price in the market, Drewry has developed a new IMO Cost Impact Calculator to better forecast the cost for this new low-sulphur fuel, which will greatly assist the parties involved in understanding the impact this will have on future ocean freight prices.

For more information, contact Debbie McGuire, Manager – Freight Solutions.

Quick Tip #37
Recognize that additional costs in today’s market place may not be avoidable

Incorporate an "allowance" for various surcharges when establishing your costing.

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