COST IMPLICATIONS FOR SHIPPERSAS IMO 2020 REGULATORY CHANGES TAKE EFFECT4THEN: Shippers can expect higher costs associated with their marine freight due to the increased cost of lower sulfur content fuel oil.

IF: Marine carriers comply by switching to low-sulfur fuel oil...

THEN: Shippers should expect the cost of scrubber installation to be accounted for within carriers’ surcharges as a means of recovering their capital expenditures, even though the cost of HSFO is anticipated to be considerably lower than low-sulfur means of compliance.

IF: Scrubbers are installed enabling carriers to continue consuming HSFO...

THEN: Shippers can expect increased costs associated with a less accessible and more expensive fuel. In the long run, however, costs will remain more insulated as regulations continue to change.

IF: Marine carriers opt to use LNG as an alternative fuel...

THEN: Shippers should be aware that their marine supply chain is susceptible to significant risk, because the industry has yet to define the penalty for non-compliance.

IF: Carriers choose not to comply with new sulfur regulations...

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