Freight shipping costs are on the rise
The International Maritime Organization plans to enforce reduced emissions, which is expected to cost the shipping industry an estimated $60 billion.
• On January 1, 2020 the IMO (International Maritime Organization), in an effort to reduce the shipping industry’s greenhouse gas emissions by 50% from 2008 levels by 2050, will enforce a ban on ships using fuel that has a sulfur content of 0.5 percent or higher.• Costs to reduce emissions from higher-sulfur fuel are between $1 million to $10 million per ship. • Given the low level of readiness to comply, the global shipping industry will undergo a disruptive transition. • Fuel prices will become volatile as purchasers pursue pricing advantages before the Jan. 1 deadline. • Fuel bills for the shipping industry are estimated to rise an additional $60 billion. • Some crude oil tankers could see a 25% increase in shipping costs resulting in higher oil/gas prices for consumers. • Higher seaborne freight costs will raise prices for companies and households globally. - - -