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OCEAN FREIGHT – NEW LOW SULFUR REGULATIONS

August 19, 2019

Dear Customer

Why we are writing?
The IMO (International Maritime Organization) will implement per 1st of January 2020 new regulation – IMO 2020 – with the aim to reduce marine pollution by the shipping industry.
 
Background
IMO2020 is the latest regulation in a series of steps by the International Maritime Organization (IMO) to reduce emissions in response to climate change. It introduces a new marine fuel regulation, which limits the sulphur emissions caused by marine fuels. Sulphur, a natural element of crude oil from which shipping fuel is derived, is a key cause of air-polluting particulates (soot) emitted by ships. The new sulphur level regulation is intended to reduce the amount of air pollution generated by the shipping industry and improve air quality.

This sulphur cap has been implemented for, in addition to its environmental benefits, the positive impact it can have on human health, particularly for those who live and work close to port cities and coastal communities. As a primary source of SO2, ships produce colorless, reactive gaseous air pollutant known to cause respiratory diseases that lead to premature death.

To date, ships have been able to use high sulphur fuel oil (HSFO) with a sulphur content of up to 3.5%. IMO2020 requires using fuel with a sulphur content of 0.5 % or lower and will come into effect as of 1st January 2020.
 
What is the cost impact on transportation costs?

Regardless whether a ship is retrofitted with a scrubber or has to use LSFO or LNG, cost of compliance with the new regulation will be significant and will severely impact freight rates. So far no ocean carrier has made any firm announcement on the cost impact yet. However we expect to see increases as of Q3, 2019.
 
What is DHL doing to help me as its customer?
We will continue to inform you about further developments in the coming months. It goes without saying that we are in constant dialogue and negotiation with our partner carriers. Whereas we will do our utmost to mitigate the impact for our customers we strongly recommend to take IMO2020 into account as of Q3, 2019 and the years to come.  
 
For your information we are hosting a meeting relating to this subject:

  • 25th September in Aalborg and Vejle
  • 26th September in Copenhagen

Invitations to follow.
If you require any further details, please contact your local DHL Global Forwarding Sales or Customer Service representative.
 
Contact our Experts
 

Yours sincerely

DHL Global Forwarding
Experts in Global Trade

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