Shippers Struggling to Get 2020-Compliant Fuel



Shippers Struggling to Get 2020-Compliant Fuel
Ships hauling everything from iron ore to coal and grains are struggling to obtain the fuels they need to test them in time for the start of sweeping environmental legislation.

$60 Billion

The IMO’s rules will add more than $60 billion in industry costs over the next three years, New York-based Kroll Bond Rating Agency, a credit grader that follows the sector, said in report dated Sept. 27.

Dry bulk vessels will probably have higher fuel-cost-to-cargo-value ratio compared with other vessels, the agency said. Costs of freight for long-haul routes may rise to more than 20% of a cargo’s value, depending on the price of low-sulfur fuel, from about 15% currently, it said.

Dry bulk shipping’s profits that hinge on the efficiency of its operations will be significantly impacted by the new rules, Fafalios said.

“What we are cautious about is how the vessels are going to be viewed by port state control when they fail to acquire compliant fuel,” Fafalios said. “We would like there to be a reasonable or pragmatic treatment especially in the early period, we would like to have a pragmatic early phase. It would be unacceptable to have even one ship drifting powerless on the high seas as a result of 2020-compliance.”

To contact the reporters on this story:
Firat Kayakiran in London at fkayakiran@bloomberg.net;
Prejula Prem in London at pprem1@bloomberg.net

To contact the editors responsible for this story:
Alaric Nightingale at anightingal1@bloomberg.net
John Deane


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