For Immediate Release
LONG BEACH, California – March 3, 2019
Gemini Shippers Group and Seabury Capital’s Maritime Subsidiary Releases a Report with Insights for Carriers and Shippers on How to Navigate the New IMO 2020 Regulation
Gemini Shippers Group , today released a whitepaper, produced in cooperation with Seabury Maritime LLC (“Seabury Maritime”), the global maritime and transportation investment & merchant banking and industry advisory firm, a division of Seabury Capital Group LLC, providing insight and a general overview of the issues related to the implementation of the International Maritime Organization 2020 (“IMO 2020”) regulation on sulfur oxide emission.
With less than ten months before the IMO 2020 regulation on sulfur oxide emission goes into effect Jan 1, 2020 carriers and shippers alike are facing an uncomfortable uncertainty over its potential effects on costs and freight rates as they enter the 2019-2020 trans-Pacific contracting period. The IMO 2020 regulation mandates the reduction of sulfur oxide emission from 3.5 percent m/m to 0.5 percent m/m.
“The 2020 deadline to reduce sulfur oxide emissions is one of the most significant regulations impacting liner shipping in recent memory,” commented Seabury Maritime Vice President Nikos Petrakakos. “With fuel costs already representing more than 50 percent of total operating expenses, the IMO 2020 poses an increase too significant for carriers to absorb and stay operational.”
The whitepaper details that the lack of industry standard for fuel-surcharges computation or a clear picture of the underlying costs for low-sulfur fuel allows participants to only roughly estimate its economic impact. Several factors affecting a carrier’s calculation of the fuel surcharges add complexity, making transparency ever so paramount to building trust on both sides.
Kenneth O’Brien, Chief Operating Officer of Gemini Shippers Group, commented: “Through our collaboration with our partners at Seabury Maritime, we have identified the inherent risks and cost drivers represented by the IMO 2020 regulation. Our desire to add transparency to the issues will help shippers and carriers alike navigate the 2019-2020 contracting season.”
The whitepaper will be presented during The Journal of Commerce’s Trans-Pacific Maritime Conference held March 3-6 in Long Beach, CA. Access the complete document here. For further information on the study or to speak with the team at Gemini Shippers Group or Seabury Maritime to discuss fuel strategies please contact the team at Gemini Shippers Group.