Low-sulfur fuel availability in ocean shipping – and the higher prices expected to be paid for it – will not have the chaotic effect on the transportation and fuel markets as many are predicting, according to the leading lobbying group for the containership sector.
John Butler, president of the World Shipping Council (WSC), acknowledged that it has only been in the last several years that the maritime industry began paying close attention to the IMO 2020 bunker fuel regulation, even though it has been known about for a decade. But with the January 1, 2020 deadline less than a year away to meet the lower-sulfur fuel standards, there is more certainty in the market.
“A few years back there was a lot of speculation in the [pricing] models, so the delta was really wide in terms of predictions,” Butler told FreightWaves during the Association of American Port Authorities Spring Conference in Washington, D.C. this week.
“But what I’m seeing now is more encouraging, because we’re seeing more and more public announcements from bunker suppliers and oil majors on new low-sulfur fuel products. And while I’m not privy to them, our members are having a lot of conversations with their fuel suppliers to make sure fuel product is going to be there to meet the demand.”