How does IMO bunker fuel reform add up for consumers?

The shipping industry looks set to be shaken up by the International Maritime Organization’s decision to cut global bunker sulphur limits to 0.5% in 2020. Most operators will be forced to buy cleaner, more expensive fuels, raising their bills considerably, but that doesn’t mean consumers will endure similarly high prices.

 

It looks set to be a highly disruptive change for shipping, as each company competes for customers by holding to as small a rise in costs as they can get away with. But a closer look at those costs shows the impact felt by consumers may be limited.

But even with price rises of two or three times higher, consumers are not going to notice a big impact on their wallets in 2020 because of the IMO’s decision.

The tricky part for ship operators will be passing on these increased costs in higher freight rates — without losing customers as they do. In an industry that’s already going through a wave of consolidation, that challenge may be too big for some.