SHIPPING giant WW Ocean says it has outlined the key principles of its response to the IMO Sulphur 2020 scheme.
From 1 January 2020, the global shipping industry moves from a standard of 3.5% sulphur to a new type of fuel with maximum 0.5% sulphur.
WW Ocean has outlined the key principles of its response, which includes using an industry-wide benchmark for very low sulphur fuel oil prices, as well as modifications to Bunker Adjustment Factors.
“The Wallenius Wilhelmsen Group welcomes the global Sulphur cap as an important step in reducing the impact of global supply chains on people’s health and the environment,” said WW Ocean chief commercial officer Simon White.
According to WWO, bunker fuel and commodity analysts agree IMO Sulphur 2020 will see prices of compliant VLSFO rise above current 3.5% fuels.
“Fundamental to this regulatory change is the principle that freight rates should reflect the true economic cost of shipping goods,” Mr White said.
“Accordingly, the cost implications of IMO Sulphur 2020 must be relayed in full to cargo owners.”
WW Ocean says it has been engaging with customers to raise awareness of the change and ensure it is recognised in contracts from beyond 2020.
As of October 1 2019, VLSFO is to be considered the new standard.
“The Wallenius Wilhelmsen Group companies will remain in close contact with customers throughout 2019 and share further information as it comes to hand,” Mr White said.
“This is a regulatory change with far ranging impacts for global shipping and we want to ensure each customer understands the ramifications for their business.”