Market Information

IMO 2020 regulations are making ships cleaner

Commonly known as IMO 2020, the new environmental guidelines from the International Maritime Organization for global shipping traffic will take effect in January 2020. From then on, all ships on the open sea will be required to reduce their emissions of sulfur oxides by 85 per cent. This applies worldwide to all fuels used on the open sea.

IMO 2020 is an important step towards achieving a better ecological balance sheet for the industry, as international sea transportation generates about one billion metric tons of carbon dioxide each year and is responsible for 3 percent of all fine particulate matter created by human activity.

Carriers will have a number of more environmentally friendly options available to them. For example, they may choose to continue using heavy oil but also install special exhaust gas cleaning systems (scrubbers); or switch to alternative fuels such as liquefied natural gas (LNG), very low sulfur fuel (VLSF), or marine diesel oil (MDO) sein.

The relevant country’s port authority is responsible for compliance with IMO 2020 and can check this with a detector and the ship’s logs. Violators will be subject to fines, ship detention, or even imprisonment.

Being a logistics service provider, DACHSER does not operate its own ships, but works with major shipping lines. “We, too, are interested in finding the most sustainable way to handle our transports,” says Rolf Mertins, Head of Global Management Ocean at DACHSER. “At the same time, we want to offer our customers scheduling reliability.”

Based on collaboration with partner carriers, DACHSER has now developed its own fuel cost model, the DACHSER Bunker Adjustment Reference Floater (DBAF). Replacing the Standard Bunker Factor (SBF) on mid- and long-term transactions, the DBAF is calculated based on the fuel prices of all relevant trades. “On this basis, we can calculate customers’ fuel-related costs irrespective of the carrier option,” Mertins concludes.

Effective December 1, 2019, there will be a Transition Environmental Fuel Fee for all Less-than-Container-Load (LCL) Freight All Kinds (FAK) businesses until further notice. The fee is in addition to any bunker charges.

For more details, please get in touch with your local DACHSER representative.

Contact Katrine Cheng