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Home Port News Charleston's port prepares for IMO 2020

Charleston’s port prepares for IMO 2020

A new rule that’s bobbing on the horizon is set to come ashore in 2020, requiring container ships that visit Charleston and other port cities around the world to use a cleaner-burning and more expensive fuel.

Ultimately the cost of the shift will be passed down to shippers and consumers. Just how big that price tag is going to be remains uncertain.

For now, the low-sulfur fuel mandate is the talk of the commercial maritime industry.

The international rule is aimed at curbing air pollution that cargo vessels emit. According to predictions, it will raise fuel prices for container shipping lines from roughly $450 a ton now to an estimated $700 or more — costing an industry that already operates on razor-thin margins an additional $12 billion to $15 billion annually.

“For the carriers, this is a bill so large there is no way they can pay it,” maritime analyst Lars Jensen of SeaIntelligence Consulting said at the recent South Carolina International Trade Conference held at the Gaillard Center in Charleston.

Jensen said businesses that ship their goods on ocean-going vessels will have to pick up the costs, and those shippers will certainly pass them on to the buyers of their products. That could be a good thing, he said, because it will spread the expense among billions of consumers scattered worldwide rather than a handful of shipping lines.

By Jensen’s estimate, the average price of a $200 mattress would rise by about 79 cents if the expected increase in fuel prices is spread among the more than $4 trillion worth of goods moved by container ships each year. A $150 flat-screen television would cost about 39 cents more, he said.

Read more on Post and Courier.

 

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