Transpacific Stabilization Agreement Bunker

As the table shows, there is a great disparity in post-IMO bunker costs, with supports introducing their bunker programs. We can expect them to change their rates and soon present a more competitive and transparent pricing model. The method of fuel pricing for TSA member lines is being changed, while the cost of fuel for marine fuels is an obvious priority for the sector. Bunker Fuel accounts for most of the operating costs of an ocean cargo ship (up to 75 per cent) and airlines are likely to experience upward pressure on prices. Container lines are preparing for the International Maritime Organization`s request to burn low sulphur bunker fuel from 2020. This regulatory change has made the cost of bunker fuel a topic of discussion in the coming years, as it could cost the industry more than $50 billion. TSA member lines, including Maersk, MSC and Hapag-Lloyd, “found that market conditions, sail characteristics and cost structures were changing rapidly, so it was not practical to continue to publish a single guideline recommended by the TSA.” The TSA website adds that “TSA lines will use average weekly fuel prices as a resource, but they will also be able to take into account their own costs and pricing objectives in the development of their bunker pricing policy, which have always been adjusted individually.” Drewry said freight rates are expected to continue to rise due to the increase in bunker surcharges, “but for airlines, the real measure will be whether they are increasing enough to cover the additional costs.” The question remains: “Why should bunker charges be 100% based on low sulphur fuels when more and more ships are equipped with launderers (with cheaper fuels), LNG or dual fuels?” (Source: Drewry) Subsequently, the shipping companies began to put their bunker supplement independently, under the control of the European Commission. The Trans-Pacific Stabilization Agreement (TSA), a collaborative forum for ocean container companies, which provide the world`s second largest trade route between Asia and North America, announced that it would no longer publish its flagship formula for calculating fuel costs. Instead, the TSA will offer only an average weekly fuel price for the six million 40-foot containers that sail the trade route each year. With the IMO 2020 regulation, a new regulation came into force on 1 January 2020. The European Green Agreement (EGD) and the MARPOL Convention are working to reduce global pollution by reducing and controlling emissions.

Conrad added that the changes and “difficult times” in shipping in recent years meant that the association`s initial mission was no longer viable. The BAF, also known as “fuel overload” or “bunker overload,” represents the floating portion of marine freight charges to adjust fuel price volatility. The introduction of green technologies to control sulphur emissions, such as the installation of bleachers (exhaust gas), switching to renewable energy sources or the use of low- or very low sulphur fuels, entails additional costs. Compliance with this new rule means higher shipping costs – either additional logistics rates or higher fuel costs at low sulphur. RT @brainalyzed: The ups and downs of 2020 and the complexity of the market and operations underline a simple fact.