Low Sulfur Fuel Mandate

Many of you have heard about the new requirements for low sulfur fuel, and we have seen some small surcharges implemented in the last year. In 2015, however, all sources are indicating more significant increases are coming. Beginning January 1, 2015, a new low-sulfur fuel mandate implemented by the International Maritime Organization will go into effect. This mandate is in an effort to reduce sulfur emissions in the Emission Control Areas (ECAs) designated by the United States Environmental Protection Agency. As of the beginning of next year, vessels operating within the North American ECAs and parts of North Europe (including the Baltic Sea, North Sea, and the English Channel) will have to reduce their sulfur emissions from 1 down to .1 percent.

These new restrictions will come with a significant cost increase for shippers. Because fuel with a sulfur content of .1 percent is much more expensive than fuel comprised of 1 percent sulfur, shipping lines are planning to raise their charges to cover the extra costs. Steamship lines have announced charges that could run as high as $185 per TEU for cargo moving to the USA from Europe. At WSSA, we will work closely with our carriers to mitigate these increases and will keep you closely advised as to the forthcoming changes.