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Some shipping lines are screwing their customers with IMO 2020 fuel surcharge

PortandTerminal.com, January 8, 2020

LONDONDrewry Maritime Research published a shocking chart today which shows as they very politely put it, “Extreme variations in fuel charges between carriers on the same tradelane for similar-sized ships”.

While Drewry is too polite to come out and say what the chart really shows, we’re not. Some shipping lines are using the industry move to IMO 2020 compliant, low sulphur fuel to screw their customers.

Let’s breakdown Drewy’s statement as we look at the chart below that accompanied it.

Source: Drewry Maritime Research
  1. “…between carriers on the same tradelane for similar-sized ships”. Drewry’s analysis was an apples-to-apples comparison of ships and trade routes. Ships of the same size, on the same route, should be charging about the same based upon their similar fuel consumption.
  2. Extreme variations in fuel charges between carriers “Some shipping companies are using fuel surcharges, or BAFs in maritime speak, to charge significantly more than other companies for the new IMO 2020 compliant, low sulphur fuel.

Let’s look at a concrete example based upon Drewy’s findings.

Carrier 1 increased its fuel charge by +38% in 1Q 2020 when the new IMO 2020 rules kicked in vs Carrier 2 which increased theirs by only +14%. So if you’re a cargo shipper working with Carrier 1, you’re paying +24% more than you need to in fuel surcharge. You’ll figure it out in time, but for now, you’re being ripped off.

READ: $1 BILLION PROFIT: Shell admits it benefited from IMO 2020 change in fuel standards

That’s disgusting behavior on the part of Carrier 1. IMO 2020 is meant to be about reducing the maritime industry’s carbon footprint and ultimately saving lives. To use it as a short-term, short-sighted opportunity to cheat customers for profit is abhorrent behaviour.

The reason for IMO 2020 is to save lives. 

Pablo Rodas-Martini, Author of IMO 2020. A Regulatory Tsunami

The world is on fire and falling far short of meeting any of the CO2 reduction targets that it has set for itself.

Shipping, as a major contributor to global CO2 emissions, has to take meaningful leadership as part of the solution. To use a positive step in the right direction as cynically as the anonymous “Carriers” that Drewy have identified makes shipping part of the problem. Shame on them.

READ: Some companies don’t care about the Arctic. We’re going to start calling them out

Sadly, Drewy didn’t name names in their findings. We would have. The world needs to know now more than ever.

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