AAL to Introduce Low Sulphur Surcharge Ahead of IMO 2020

AAL ShippingIllustration. Image Courtesy: AAL Kobe/ Flickr-Kees Torn under CC BY-SA 2.0 license

Singapore-based multipurpose shipping company AAL Shipping revealed its plans to become fully compliant with the new IMO sulphur regulation that comes into effect on January 1, 2020.

“Over the past year, we’ve been researching the options available and decided that migration to the use of low sulphur fuel … will best meet the interests of the customers, trades and industries we service globally,” AAL Shipping said.

This fuel — with sulphur content of 0.5% or less — comprises variants such as low sulphur fuel oil (LSFO), ultra low sulphur fuel oil (ULSFO) and low sulphur marine gasoil (LS-MGO).

As all of the variants are currently more expensive than standard marine fuel, AAL expects significant implications on the economics of its daily operations.

“In the multipurpose shipping sector, we know well that one size does not fit all. Therefore, in consideration of the wide variety of cargo and trades that we handle and manage worldwide, we will be implementing various calculation methodologies to fairly share the increased cost of low sulphur fuel usage with our customers,” the company added.

According to AAL, the new measure will be implemented from September 1, 2019, as the company starts to prepare its fleet for the low sulphur fuel and begin bunkering same.

The purpose of the new regulation is to reduce sulphur oxide (SOx) levels produced across the entire shipping industry, resulting in more sustainable air quality conditions.

AAL is joining a number of companies that have already implemented low fuel surcharge as a means of compensating for the rising fuel costs stemming from the 2020 low-sulphur fuel regime. Maersk, CMA CGM, OOCL, HMM, Hapag-Lloyd and MSC are among the companies which have already started introducing the new measures to mitigate their exposure to higher costs.

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