Dear ZIM customer,

The new fuel regulations, known as “2020 Sulphur Cap”, require all marine carriers to use low sulfur fuel (up to 0.5% sulfur content) from January 1^st, 2020. The new regulations, introduced by the International Maritime Organization (IMO) are part of several international initiatives aimed at reducing marine pollution and emissions. 

All shipping companies will be obliged to comply and to significantly reduce emissions on high seas and in coastal areas. More details of the new regulations are presented on the IMO website: FAQ_2020_(English)

ZIM is well prepared to meet the new requirements. ZIM fully supports the new regulations, which will contribute to the state of our oceans and the environment; ZIM has long been a leader in sustainability and environmental awareness, as also stated in our policy and strategy.

Regulation impact

The new regulations will impact all the stakeholders in the industry.
Compliance with the regulations is currently expected to create a significant cost impact for carriers. Carriers will not be able to sustain the additional costs incurred. Therefore, ZIM will implement a New Bunker Factor (NBF) to compensate for this additional cost. The NBF will be charged separately from the basic ocean freight. The New Bunker Factor will replace all existing bunker charges.[1]

In order to assist our customers to plan ahead and prepare for the expected changes, ZIM is introducing a simple formula, to enable a general and convenient calculation of the changed tariffs, according to following parameters:

The Fuel price used in the above formula will be the average fuel price in the major bunkering ports in a given trade, and the “Trade Factor” reflects the average fuel consumption per carried TEU on round voyage basis, while taking into account the imbalance of the trade.

The New Bunker Factor will be implemented, based on the above formula, from February 15^th ,2019 [2], to enable customers to experience the method this formula works before the Sulphur cap regulations enter into force in January 2020. It must be noted that there may be later implementation dates in trades where regulatory approvals are required. [3]

Please note that due to bunkering requirements, the new Sulphur cap regulations will have an effect prior to January 1st ,2020. Therefore, the update of the New Bunker Factor based on the Low Sulphur Fuel shall start from the fourth quarter of 2019 or at the date in which it will be required to start using the Low Sulfur Fuel whichever happens earlier.

The bunker formulas in contracts that are already signed and are valid after February 15th, 2019, shall remain valid until termination or expiration, as the case may be, of these contracts.

However, commencing from fourth quarter of 2019 or the date in which ZIM starts using the LSF (whichever is earlier), the fuel price element of the formula in such contracts will be based on the Low Sulphur fuel.  

 

ZIM will keep you regularly informed about developments and changes.

Thank you for your understating, cooperation and for your continued support.

 

[1] Except bunker charges related to specific emission control areas (ECAs) as defined by IMO, EU, or other Governmental authorities 

[2] Based on the fuel price for high Sulphur fuel (IMO 380) till LSF coming into effect

[3] Such as trades subject to the US Shipping Act or the China Maritime Regulations, etc.

 

Click here to view our sulphur cap presentation