Carriers will Pay 62-70% Extra for ECA Bunkers Next Year

Ships voyaging across the Atlantic are in an ECA 35 percent of the time.

The new limits on sulfur content of fuel burned within Emissions Control Areas (ECAs) in 2015 will mean carriers will pay 62 to 70 percent extra for fuel in those areas compared with heavy fuel oil (HFO) used in the open ocean, Derik Andreoli, senior analyst for Mercator International writes at industry news site Supply Chain 24/7.

Currently the premium paid for fuel with 1.0 percent sulfur content as required by current ECA limits is $57 per metric tonne (pmt) in Rotterdam and $90 pmt in Singapore, representing a 10 percent premium over HFO in Europe and 15 percent in Asia.

Marine gas oil (MGO), which carriers are expected to adopt to meet the new limit of 0.10 percent sulfur content, costs an extra $405 pmt in Europe and $366 pmt in Asia.

Considering two liner services, Atlantic Express (ATX), which serves the European trade, and the Super Shuttle Express (SSX), which serves the Asia trade, Andreoli found that the ATX operates in an ECA 35 percent of the time, and would pay 23 percent extra to switch from HFO to MGO while in an ECA.

The SSX spends only 8 percent of its time in an ECA, meaning it would spend only 6 percent extra by switching to the more expensive fuel.

"Whether through a general rate increase, an Annex VI fuel surcharge, a bunker adjustment factor increase, or through some other means, these higher fuel costs will be passed on to shippers, and that is something to keep in mind as supply chain decisions are made in the months to come," Andreoli writes.

Carriers including Hapag-Lloyd and Maersk Line have said they will implement fuel surcharges to cover the extra cost of following ECA rules.