Higher logistics costs anticipated from IMO2020

With the aim of drastically reducing the sulfur emissions of seagoing vessels, much tighter limits will apply to the sulfur content in marine fuels from January 1, 2020 onward. Whereas, up until now, 3.5 % sulfur content was permissible, the limit will be set at 0.5 % in future according to an agreement reached by the International Maritime Organization back in 2016 in the context of IMO2020. As from 2020, the new limit will apply to around 70,000 seagoing vessels. Irrespective of whether the shipping companies decide to use fuel with a lower sulfur content in the future (at an additional cost of around USD250 per ton), install gas scrubbers in their ships (USD 6 to 10 million per ship) or convert to liquefied petroleum gas technology, these measures are likely to result in significantly higher logistics costs ranging from USD150 to USD250 per standard container. Our logistics partners currently anticipate additional costs of between EUR6 euros and EUR18 per ton as early as the third quarter of 2019, depending on the specification and capacity utilization of a standard container.

 

KME Mansfeld also supports improved environmental and climate protection as well as the targets for reducing emissions under IMO2020. We will keep you informed of further developments and make every effort to keep the consequences for our customers to the absolute minimum. Nevertheless, you should please factor in higher logistics costs to take account of IMO2020.

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