IMO 2020 - Low Sulphur Surcharge (LSS)
Dear Valued Customer,
From 1st January 2020, the new IMO (International Maritime Organization) 2020 Low Sulphur Regulation will be in effect: all sea-going vessels worldwide will have to comply and reduce their sulphur emissions by 85%.
To comply with the Regulation, sulphur in fuel oil must be reduced from 3.50% to 0.50%, in addition to the 0.10% sulphur limit already effective in the Emission Control Areas (ECA). This aims to reduce the amount of sulphur oxide emissions and should have major health and environmental benefits globally, including improving air quality and reducing risks of acidification of the oceans.
CMA CGM Group will be compliant with a mix of 3 solutions: using liquid natural gas-powered vessels, using advanced air quality systems onboard our vessels, and as the main solution, using compliant fuels with 0.50% or 0.10% sulphur.
The new IMO 2020 Low Sulphur Regulation impacts the global shipping industry and shipping costs are set to increase worldwide. As the cost of the Very Low Sulphur Fuel Oil (VLSFO) is expected to be significantly higher than the present High Sulphur Fuel Oil (HSFO), CMA CGM will implement a new price reference for its short-term and long-term contracts:
For short-term contracts of validity 3 months or shorter, please be informed that a new monthly charge – Low Sulphur Surcharge (LSS) – will be applied on top of CMA CGM’s ocean freight charges, effective 1st December 2019.
The LSS20 tariffs have been calculated using the price difference between high sulphur fuel and low sulphur fuel average prices of October 2019.
The retained value is USD 200 per ton, which is multiplied by trade coefficient, gives a value of:
|POL/ZOL||POD/ZOD||Currency||LSS20 Amount per TEU|
|All Asian ports||East Mediterranean||USD||120|
(*) The associated basic freight are available here: http://www.cma-cgm.com/ebusiness/prices-finder. Other Bunker related surcharges, THC (Origin and Destination), Peak season charges and similar charges and Safety and Security related surcharges may also apply and are accessible at http://www.cmacgm.com/ebusiness/tariffs/charge-finder. Other charges such as contingency charges and local charges may be applicable.
For long-term contracts of more than 3 months’ validity, please be advised that VLSFO will replace HSFO as the price reference for the quarterly Bunker Adjustment Factor (BAF), effective 1 January 2020. The BAF is applied on top of the ocean freight charges and will still be revised on a quarterly basis with a onemonth notice.
Rate of exchange used for retrieving LSS20 different currencies is: 1 USD = 0,9046
Should you have any question or require further assistance, please feel free to contact our Customer Service Desk or our Sales Department.