OOCL eschews scrubbers prepares for bunker recovery charge

Hong Kong-based Oriental Overseas Container Line, part of Cosco Shipping, has no plans to employ marine scrubbers on its fleet of containerships. Instead it will use low sulphur fuel to meet the demands of the new IMO Sulphur cap regulation in January 2020, the company revealed in a release at the weekend.

OOCL said it expects that the cost of its transition away from high sulphur fuel could be as much as US$500,000.

Under the current industry environment and the level of cost involved to an industry that is already very cost-sensitive for survival, shippers and consumers will need to prepare to shoulder this burden,” OOCL said.

In order to recover the cost of higher priced low sulphur fuel the company proposes, “In preparation for the surge in this operating cost and in consideration of the continual trend of rising fuel prices in the market, OOCL will be introducing a bunker recovery approach based on a floating bunker formula that will better reflect the changes in the industry environment.

“This approach will take various factors into account, including the different fuel types being used, fuel price fluctuations, ship size and capacity, and vessel utilization levels.”

Maersk, the world’s largest liner company, first raised the issue of fuel surcharges as a result of the impending legislation in mid-September when it announced a new Bunker Adjustment Factor which is designed to offset the cost of the new fuels, which the company maintains could add US$42bn to its annual fuel bill.

CMA CGM followed with a similar announcement a week later. So far it is the only company to try to put a figure on the likely cost to shippers and consumers. It priced the per box cost at US$160.

The measure proposed by the container lines has been the cause of much consternation among shippers local and worldwide.

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