More Than Shipping https://www.morethanshipping.com Brought to You by MTS Logistics Fri, 03 Apr 2020 17:05:48 +0000 en-US hourly 1 Airlines Change to Cargo-Only Flights as a Result of the COVID-19 Pandemic https://www.morethanshipping.com/airlines-change-to-cargo-only-flights-as-a-result-of-the-covid-19-pandemic/ https://www.morethanshipping.com/airlines-change-to-cargo-only-flights-as-a-result-of-the-covid-19-pandemic/#respond Fri, 03 Apr 2020 17:05:32 +0000 https://www.morethanshipping.com/?p=14620 Passenger air travel has historically declined in the past few weeks due to COVID-19. Globally, airlines have canceled more than 185,000 flights since the end of January, according to the International Air Transport Association. Airlines are facing almost-empty flights as a result of the coronavirus pandemic, and some of the world’s biggest airlines are turning […]

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Passenger air travel has historically declined in the past few weeks due to COVID-19. Globally, airlines have canceled more than 185,000 flights since the end of January, according to the International Air Transport Association.

Airlines are facing almost-empty flights as a result of the coronavirus pandemic, and some of the world’s biggest airlines are turning their focus to cargo.

Here are some interesting facts around the U.S. and world:

  • Delta Airlines started regular cargo-only flights which have not operated since 2009.
  • American Airlines had their first cargo-only flight since 1984.
  • According to the Transportation Security Administration, passenger traffic at was down 93% at Atlanta’s Hartsfield-Jackson Airport checkpoints March 29th, compared with a year ago.
  • Southwest Airlines started to offer cargo-only flights for the first time in its nearly 50-year history.
  • Deutsche Lufthansa AG has cut 95 percent of its passenger flights and decided to use some of those for cargo-only flight.

The outlook is so dramatic that the U.S. airline industry has already asked for more than $50 billion in federal aid. It is not hard to understand most of the airline’s cargo-only flight choices when there is a combination of low jet fuel prices, pilots who are being paid whether or not they fly, and high freight rates.

Airlines will also have to figure out flight crew assignments and make sure have enough staff around, with the proper equipment, to run a cargo operation. However, they’ve experienced similar situations before, such as the 2002 SARS contagion and during the 2015 port strikes on the U.S. West Coast.

It looks like the current situation will be continuing for airlines at least 1-2 more months, and it will take some time until things get back to normal even when the current pandemic ends.

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COVID-19 Outbreak Forces U.S. Ports to Plan for Non-Essential Cargo Disruptions https://www.morethanshipping.com/covid19-forces-us-ports-to-plan-for-cargo-disruptions/ https://www.morethanshipping.com/covid19-forces-us-ports-to-plan-for-cargo-disruptions/#respond Wed, 01 Apr 2020 16:55:53 +0000 https://www.morethanshipping.com/?p=14615 According to JOC.com, with reduced global demand across-the-board due to coronavirus, U.S. ports are seeing shippers wanting to keep large amounts of non-essential cargo at the ports, further disrupting the supply chain. Coronavirus had already forced shippers to cancel large amounts of orders and in many cases, kept containers from being shipped out at all. […]

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According to JOC.com, with reduced global demand across-the-board due to coronavirus, U.S. ports are seeing shippers wanting to keep large amounts of non-essential cargo at the ports, further disrupting the supply chain.

Coronavirus had already forced shippers to cancel large amounts of orders and in many cases, kept containers from being shipped out at all. In March, commercial activity in China picked up as manufacturers returned to work. With the U.S. coronavirus outbreak ramping up and economic activity collapsing, U.S. port officials are concerned that U.S. ports will see large delays and backups of loaded containers sitting inside terminals nationwide.

Some of America’s largest ports are already looking to temporarily expand capacity, in a bid to salvage some kind of normalcy and allow capacity to be handled at manageable levels. In some cases, expanded capacity may come from lands that are not actually part of some ports, though acquisitions.

Many U.S. ports are undertaking expansion efforts to ensure they can efficiently handle essential goods and cargo coming in and leaving the U.S.

With the COVID-19 outbreak, huge retailers such as Amazon have already enacted policies that prioritize essential goods being shipped long before non-essential goods. For example, while food and medical supplies are essential, sports equipment and a new bedding set is not.

In many cases, those non-essential goods are just piling up at terminals nationwide, leaving ports scrambling to avoid disruptions to the essential goods supply chain. Although ports have faced this situation in the past, with natural disasters and other calamities, there has not been a time in modern history where all ports face a similar situation at the same time on such a large scale.

At this point, it is indisputable that COVID-19 has caused a high level of disruption. Additionally, it is clear that COVID-19 has affected shipping on a large scale. While not every U.S. port has been affected yet, most of the nation’s largest ports are preparing for dire situations over the next several weeks and months, and seem to be aware of the dangers COVID-19 poses on disruptions to the supply chain.

As further delays and disruptions are inevitable, we at MTS Logistics will continue to keep every of our customers and members of the community informed of the latest developments.

 

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COVID-19 Measures: Blank Sailings https://www.morethanshipping.com/covid-19-measures-blank-sailings/ https://www.morethanshipping.com/covid-19-measures-blank-sailings/#respond Mon, 30 Mar 2020 17:45:17 +0000 https://www.morethanshipping.com/?p=14609 While life is slowly returning to normal in China, the rest of the world is now experiencing a significant distribution due to COVID-19. The decline in trade is expected until the big dilemma is over. As the world battles the coronavirus pandemic, the global maritime transport industry is playing a critical role in response to […]

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While life is slowly returning to normal in China, the rest of the world is now experiencing a significant distribution due to COVID-19. The decline in trade is expected until the big dilemma is over.

As the world battles the coronavirus pandemic, the global maritime transport industry is playing a critical role in response to the virus. The International Chamber of Shipping (ICS) sent a letter to all governments on March 19th to keep maritime trade moving.

Nonetheless, the majority of steamship lines have decreased their number of seaborne vessels on the Asian trade routes connecting China and Hong Kong with other major shipping ports around the world. One of the largest shipping alliances, the 2M Alliance, containing Maersk Line and MSC, has drastically reduced the number of port calls, to and from China, increasing “blank sailings”. The COVID-19 outbreak, joined with the Chinese Lunar New Year holiday period, has drastically increased the number of blank sailings over the last few months.

Previously announced blank sailings inevitably lead to an increased number of blank sailings for export cargo back to Asia anywhere from three to 10 weeks, depending on transit times.

Ultimately, the newly-added blank sailings are expected to cause more difficulties in the near future.

In an interview, Port of Long Beach executive director Mario Cordero said “It has been challenging because of the trade war that caused significant disruption in the supply chain. In addition to that with the COVID-19 crisis, the industry went from uncertainty to significant disruption to the point of chaos in the supply chain. It has been a crisis of historic proportions; it is a global challenge.”

Mario Cordero also added that the San Pedro Bay complex, which includes both the Port of Long Beach and Port of Los Angeles, had a combined total of 60 blank sailings due to the COVID-19 crisis.

On the East Coast, The Port Authority of New York and New Jersey expects cargo volumes through the port to decline by 30 percent in part due to a wave of blank sailings on vessels coming from China.

Overlooking the current pandemic, cross-border flows of relief goods such as food and medical equipment will escalate dramatically.

Limitations on trade and cross-border transport may prevent needed aid and technical support, could disrupt businesses and have adverse social and economic effects on affected countries.

We can’t ignore the fact that the outbreak will wane, and Chinese factories will ramp back up again as they have currently started to do so, and at a higher rate than usual to catch up with lost production. This will eventually create a surge in demand for container shipping. However, due to the early negative impacts, carriers will experience problems getting their equipment back to China, and exports might be hampered by an equipment shortage.

The industry is unsure and does not yet fully know what the eventual full scale and impact of the COVID-19 crisis will be.

Still, one can already predict a series of events which will impact global trade, both directly and indirectly. This means there would be a chain reaction affecting other industries that rely on shipping, as well as recognize a greater systemic danger within the industry.

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How to Conduct Business as Usual – Virtually During the Time of COVID-19 https://www.morethanshipping.com/how-to-conduct-business-as-usual-virtually-during-the-time-of-covid-19/ https://www.morethanshipping.com/how-to-conduct-business-as-usual-virtually-during-the-time-of-covid-19/#respond Fri, 27 Mar 2020 17:24:37 +0000 https://www.morethanshipping.com/?p=14606 MTS Logistics took the most necessary step to meet the challenge of COVID-19, to protect the staff’s health and wellbeing, along with that of our entire community – moving online. There are numerous advantages and disadvantages to take into account when running a business as usual – virtually. Of course, while working from the comfort […]

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MTS Logistics took the most necessary step to meet the challenge of COVID-19, to protect the staff’s health and wellbeing, along with that of our entire community – moving online.

There are numerous advantages and disadvantages to take into account when running a business as usual – virtually.

Of course, while working from the comfort of your own home seems great and relaxing in theory, it becomes important to understand the best ways to maximize the efficiency of the arrangement. You become truly independent in all you do and will rely on self-motivation, self-discipline, your own focus and drive. You can get more work done in this way as you adapt to learn a new way of completing daily tasks, set goals for yourself, and find methods that work best for you and your team.

Communication is key – when peeking your head over to talk to your colleague is no longer an option, switching to conference calls, messaging, and even video calls. You’ll become in expert in communicating and expressing what needs to be done without having to physically be there, and this can be difficult when adjusting to new procedure. But like all things, with excellent leadership and motivated employees (which we have an abundance of) this becomes second nature and an excellent team-building opportunity.

While working in a comfortable familiar setting may blur work life with home life, it’s important to “clock out.”

When there’s no separation of going to the office and going home, there’s a tendency to think, just one more email or one more phone call. It’s important to stick to a routine/schedule to stay at your peak performance to avoid burnout. The temptation to engage in household matters since you are at home can also be very strong. Suddenly, you may start feeling obliged to clean the home, do the shopping, the cooking, the home finances and the socializing, all while meeting the full requirements of the job too. It is essential to draw the line between home and work to avoid both areas suffering.

It can be difficult for everyone having to adjust so quickly, so regular check-ins help you stay accountable and help bridge the gap of distance between your team.

While overcoming technical difficulties and household distractions with the right mindset, you can do a great job and enjoy the benefits that go along with it. While enforcing high productivity and time management along with strict procedure and roles, there is no doubt each team member will succeed.

To motivate yourself to persevere in working at home alone without succumbing to the distractions and losing drive and momentum is a tough achievement. However, this can be an easily cultivated skill with the support of your manager and team, and by focusing on your personal and professional growth and goals.

Stay safe and we at MTS Logistics wish you all a great virtual day at work!

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Just a Little More Than Shipping in the Time of COVID-19 https://www.morethanshipping.com/just-a-little-more-than-shipping-in-the-time-of-covid-19/ https://www.morethanshipping.com/just-a-little-more-than-shipping-in-the-time-of-covid-19/#respond Thu, 26 Mar 2020 19:26:35 +0000 https://www.morethanshipping.com/?p=14602 With the virus that shall not be named (we are all really tired of hearing its name), we are all facing health, business, and social challenges. Unfortunately, there are many people that are suffering all around us. For this reason, we at MTS Logistics feel it is important to share some positive news with our […]

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With the virus that shall not be named (we are all really tired of hearing its name), we are all facing health, business, and social challenges. Unfortunately, there are many people that are suffering all around us. For this reason, we at MTS Logistics feel it is important to share some positive news with our community. We decided to share something with our readers not related to shipping, and we aim to put a little smile on your faces.

First, at MTS Logistics, our entire team and their loved ones are healthy, and we are safely working from home. It’s really great to see our team is performing just as they would if they were in our offices right now. We are so proud of that!

Next, you should know that after working from home partially last week, this week, MTS Logistics is operating fully from home. For us, business is as usual – the only difference being that business is virtual. Instead of punching in, we are doing virtual punching. Instead of meeting rooms, we are using virtual meeting rooms. And, instead of chatting from one cubicle to the next, we are using Microsoft Teams, WhatsApp, and other platforms.

Most importantly, for the greater good, we must keep social distancing. Despite that reality, we can still have fun! With all the craziness, we wanted to share with all our readers how your beloved More Than Shipping Authors (The World’s Best Logistics Team) is working from all over the Tri-State Area and the world.

We wish all of our readers, customers, vendors, and the entire MTS Logistics community good health, peace of mind, time with your families, and personal wellness. When this crisis is over, the world will emerge stronger than ever before!

Check out the MTS Logistics team in action from home across the globe!

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New Cooperation between Los Angeles and Long Beach Aims to Reclaim Market Share https://www.morethanshipping.com/new-cooperation-between-los-angeles-and-long-beach-aims-to-reclaim-market-share/ https://www.morethanshipping.com/new-cooperation-between-los-angeles-and-long-beach-aims-to-reclaim-market-share/#respond Wed, 25 Mar 2020 17:10:04 +0000 https://www.morethanshipping.com/?p=14599 Last month, the ports of Los Angeles and Long Beach signed a memorandum or understanding (MOU) pledging higher levels of cooperation in the hopes of increasing cargo velocity and security at the two respective ports. The new pledge seeks to address a loss of market share which has become progressively more acute over the past […]

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Last month, the ports of Los Angeles and Long Beach signed a memorandum or understanding (MOU) pledging higher levels of cooperation in the hopes of increasing cargo velocity and security at the two respective ports.

The new pledge seeks to address a loss of market share which has become progressively more acute over the past two decades.

While Los Angeles-Long Beach comprises the largest port complex in the U.S., the combined ports have experienced a 22-percent loss of market share since 2002, mainly to ports along the eastern seaboard. The recent trade wars and import tariffs may only have served to exacerbate the problem.

The MOU between the two hopes to reverse that trend as the ports pledge their cooperation in five specific areas:

  • Digital connectivity
  • Cybersecurity
  • Cargo transfer predictability
  • Establishing productivity metrics
  • Workforce development

While the ports of Los Angeles and Long Beach have collaborated on various efforts and projects since the mid-1990s, the MOU represents a more comprehensive agreement specifically designed to help both ports become more competitive in the digital era. The two ports have already been sharing data among stakeholders to ascertain where the productivity problems lie, and the MOU aims to resolve those issues that have been identified. First steps include creating a plan of action to define priorities and objectives based on the areas addressed by the MOU. The agreement also pledges to involve all stakeholders in the effort to improve productivity at the ports—including drayage, shipping lines, railroads, beneficial cargo owners, labor and terminal operators.

The MOU has been a document several months in the making.

In August 2019, Gene Seroka, executive director for the Port of Los Angeles, told the Los Angeles Harbor Commission that the agreement intended to establish the two ports as “the gateway of choice in North America.”

For the first time in a generation we are taking this relationship to the next level,” Seroka told the Commission. “The fight is not L.A. versus Long Beach for that last container. It’s about keeping cargo here in southern California.”

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Turkey’s Mersin International Port Breaks a TEU Record https://www.morethanshipping.com/turkeys-mersin-international-port-breaks-a-teu-record/ https://www.morethanshipping.com/turkeys-mersin-international-port-breaks-a-teu-record/#respond Mon, 23 Mar 2020 16:16:17 +0000 https://www.morethanshipping.com/?p=14595 Mersin International Port became Turkey’s largest port with a record of 1.9 million TEUs in 2019. Mersin was a small fishing village in 841, but today it is a major seaport located on the north-eastern coast of the Mediterranean Sea in southern Turkey. As one of the largest harbors in the country, it is Turkey’s […]

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Mersin International Port became Turkey’s largest port with a record of 1.9 million TEUs in 2019.

Mersin was a small fishing village in 841, but today it is a major seaport located on the north-eastern coast of the Mediterranean Sea in southern Turkey. As one of the largest harbors in the country, it is Turkey’s main gateway to the Mediterranean Sea.

Developing parallel to the global port industry, Mersin International Port reached a 1.9 million TEU container business volume in 2019, increasing by 12 percent compared to the previous year. It set a record of being the first port to reach the 1.9 TEU container volume in the history of Turkey.

Today Mersin International Port accounts for 17% of the whole Turkish Cargo volume.

Mersin International Port is one of the largest container ports in the South of Turkey, serving the industrial cities in the region with a significant contribution to the country’s foreign trade. It is connected to all main ports around the world through over 20 shipping lines making regular calls.

The Mersin Free Zone

The Mersin Free Zone is adjacent to Mersin International Port and is connected through a passage within the port referred to as the “corridor”. The proximity of Mersin International Port to the Free Zone has a positive effect on cargo traffic and saves time for customers. Mersin International Port is the only port in Turkey connected to the Free Zone through a corridor.

Mersin International Port Railway Transportation

Mersin International Port is connected to Gaziantep, Kayseri, Kahramanmaras, Konya, Karaman, Ankara and other industrial cities as well as railway stations across the borders. Inside the port area there is also a four-lane railway terminal which provides container handling and transportation facilities.

Road Transportation

Mersin International Port is connected to all industrial cities through highways. Through efficient inland haulage, transportation to Middle Eastern countries can be provided.

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The Ongoing Effects of COVID-19 on U.S. Shipping Operations https://www.morethanshipping.com/the-ongoing-effects-of-covid-19-on-u-s-shipping-operations/ https://www.morethanshipping.com/the-ongoing-effects-of-covid-19-on-u-s-shipping-operations/#respond Fri, 20 Mar 2020 16:09:40 +0000 https://www.morethanshipping.com/?p=14590 Disruptions from COVID-19 are having significant effects on ocean transports. The U.S. is in the early stage of containment, so it may be months until we see daily life return to normal. In China, people are back to work after their government imposed a lockdown in Wuhan nearly two months ago. According to the Baidu […]

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Disruptions from COVID-19 are having significant effects on ocean transports.

The U.S. is in the early stage of containment, so it may be months until we see daily life return to normal. In China, people are back to work after their government imposed a lockdown in Wuhan nearly two months ago. According to the Baidu Migration Index, 65% of people have returned to work in China. The Chinese government expects to be fully functional by June.

U.S. imports from China hit a 4-year low in February, around 630,000 TEU, which is a 22% drop from last year.

There are rippling effects on the supply chain, so it may be not be until 2021 that we see volumes bounce back. According to Lars Jense, CEO of SeaIntelligence Consulting, this could be a 17 million-TEU loss in the shipping industry. The comparison is from the financial crisis of 2008 when cargo volumes dropped 10% that year.

As expected, when demand drops, ocean carriers will blank sailings.

In other words, more than 100 sailings have been suspended or cancelled – an estimated 1.9 million TEUs of product. With ships out of rotation, U.S. terminals have lower utilization rates, resulting in reduced hours or temporary closures.

Seattle and Tacoma’s blank sailings have nearly tripled from last year. In Seattle, “Terminal 18 will temporarily be closing gate and terminal operations on Fridays, beginning March 6, 2020 due to ongoing volume declines”. In Baltimore, Seagirt terminal closed two days in March and had reduced operating hours “due to a decline in international container volumes.” Two Port of Miami terminals will also have temporary closures because of low import volumes.

The Port of Houston temporarily closed two container terminals: Bayport and Barbours Cut.

Unlike the other terminals, this was not due to blank sailings or reduced volumes. A Houston worker tested positive for COVID-19. Terminal operations were suspended on Wednesday, March 18th and Thursday, March 19th. Due to a quick response from the Port of Houston, operations will return back to normal today. An investigation concluded the driver had limited contact with other workers. The driver spent the majority of his work day in his truck cab. Any person that was in direct contact with the driver during the two days he worked at the Port of Houston are now in self-quarantine.

Every day, there seems to be new developments that will effect the global supply chain.

Here at MTS Logistics, we will continue to monitor the ever-changing environment. Please contact your MTS representative to help find solutions during these unique times.

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New York-New Jersey Port Authority Feeling the Hit from Coronavirus https://www.morethanshipping.com/new-york-new-jersey-port-authority-feeling-the-hit-from-coronavirus/ https://www.morethanshipping.com/new-york-new-jersey-port-authority-feeling-the-hit-from-coronavirus/#respond Wed, 18 Mar 2020 14:18:43 +0000 https://www.morethanshipping.com/?p=14587 In the wake of the global spread of coronavirus disease 2019 (COVID-19), recently labeled a pandemic by the World Health Organization, the Port Authority of New York and New Jersey (PANYNJ) is bracing for a significant drop in cargo volumes for the first quarter of 2020, JOC.com reports. PANYNJ already reports at least a dozen […]

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In the wake of the global spread of coronavirus disease 2019 (COVID-19), recently labeled a pandemic by the World Health Organization, the Port Authority of New York and New Jersey (PANYNJ) is bracing for a significant drop in cargo volumes for the first quarter of 2020, JOC.com reports.

PANYNJ already reports at least a dozen blank sailings during the month of March and into April, all of which have been attributed to coronavirus. Nearly one-third of cargo volume into the port comes from China, and factory closures in response to the virus have affected exports from that country.

The Port Authority continues to review the situation with terminal operators to assess the impact of the reduced cargo volume on port operations. “This remains a very fluid situation and we are working very closely with our terminal operating partners to plan accordingly,” Port Authority director Sam Ruda told JOC.

New York-New Jersey had already been observing a decline in volume prior to the outbreak, in part attributed to lower imports as affected by the US-China trade war.

Cargo volumes were down by 2.5 percent in January 2020 compared with the same month in 2019. Assuming the same level of traffic into the port this year as last year, the 13 or so blank sailings translate to a drop of 7.2 percent. This figure is still modest compared to the expected downturn in other ports during Q1 of 2020. Ports in Los Angeles, Long Beach, Virginia and South Carolina have all forecasted declines in container volume between 11 and 15 percent.

Despite the current effects of the pandemic on cargo volume, NY-NJ is preparing a significant rebound in April as the virus is reported to be on the wane in China.

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IMO 2020 and Oil Prices in Shipping https://www.morethanshipping.com/imo-2020-and-oil-prices-in-shipping/ https://www.morethanshipping.com/imo-2020-and-oil-prices-in-shipping/#respond Mon, 16 Mar 2020 15:42:08 +0000 https://www.morethanshipping.com/?p=14584 IMO 2020 is a regulation set by the International Maritime Organization that states that as of January 1, 2020, the sulfur emissions of all maritime vessels must be limited to 0.5% m/m (mass by mass), down from the current 3.5% m/m. Oil is the major source of feeding the global economy, supplying 95% of all the energy used in world transport. […]

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IMO 2020 is a regulation set by the International Maritime Organization that states that as of January 1, 2020, the sulfur emissions of all maritime vessels must be limited to 0.5% m/m (mass by mass), down from the current 3.5% m/m.

Oil is the major source of feeding the global economy, supplying 95% of all the energy used in world transport. Maritime transport, which carries over 80% of the volume of global merchandise trade, relies heavily on oil for propulsion, and in view of the limitations imposed by existing technology and costs, there is not yet an alternate technology to replace oil.

For container trade, the effect of oil prices on container freight rates is estimated to be larger in periods of sharply rising and more volatile oil prices, compared to periods of low and stable oil prices.

Starting January 2020, the United Nations shipping agency the International Maritime Organization (IMO) bans ships from using fuels with a sulphur content above 0.5%, compared with 3.5% now. By the law, regulations are aimed at improving human health by reducing air pollution.

So what does IMO 2020 mean for shippers? How will IMO 2020 affect shippers, shipping costs and end consumers?

IMO 2020’s changes to the bunker fuel market can potentially affect fuel oil markets overall. As a result, all regions will experience higher refinery utilization, pushing markets to simpler marginal configurations and higher margins in 2020.

Shippers don’t need to make any drastic changes to their process, but they do have to be aware of the price volatility will definitely take place in 2020. When the price of ship fuel goes up by 50%, this could increase the cost of port-to-port sea freight costs by 10-20%.

The short story is that price increases will be passed onto shippers, which will ultimately be passed on to end consumers. As shippers are aware, any past cost increases along the supply chain has been inevitably passed to the shippers, which increases the landed cost of goods.

The port-to-port sea freight costs will increase and will be passed on to the party that is paying for the sea freight.

The party that ultimately pays for the sea freight depends on the IncoTerms that goods are sold. For example:

  • If exporters ship on CIF/CFR terms, they are already covering the costs of sea freight, so the exporter’s costs will increase.
  • If the exporter is selling on FOB terms, the importer is paying for the costs of sea freight, so the importer’s costs will increase.

In both cases, this will inevitably increase the landed cost of products. Importers and exporters must take note and closely monitor the increases in order to understand the actual cost of their products, and sell pricing. Importers and exporters will then be faced with the decision of how much of the increased costs they are willing to absorb, and how much will be passed on to customers and end consumers in the market.

The increased costs of fuel could also increase vessel transit times. Shipping lines may increase the practice of “slow steaming”, where ships sail at slower speeds to conserve fuel. This will further restrict capacity and also increase transit times.

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