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Fishery enterprises face difficulties because of the sharp increase in freight

Tuesday 29, 10 2019
Due to changes in fuel shipping lines, shipping costs increased by 30% ...
Fishery enterprises face difficulties because of the sharp increase in freight

Vietnam Association of Seafood Exporters and Producers (Vasep) said that in October 2019, many Vietnamese seafood exporters received notices from shipping lines about the low sulfur surcharge - LSS for all cargo containers by IMO regulations.

As reflected by some seafood enterprises, every year, shipping lines increase their fees with different rates without any route and inconsistency between shipping lines. This fee increases on average from 135 to 220 USD / container.

It is estimated that with seafood products exported to and imported from Japan, businesses have to pay the additional US $ 240 per container, which means a 30% increase in freight. This adds a great cost to the seafood business.

Earlier, in June 2019, the Vietnam Registry Department held a meeting to meet and dialogue with international shipping businesses to disseminate and guide the implementation of new international regulations relevant to ocean shipping.

It has announced that from January 1, 2020, ships operating on international routes must meet fuel oil standards with a sulfur content of less than 0.5% of IMO.

At this conference, the Vietnam Shipowners Association said that in order to implement this strict regulation of IMO, container lines around the world began to apply many solutions such as: installing sulfur filtration systems; switching to MGO / MDO fuel at a higher cost than using HFO (Heavy Fuel Oil) or switching to LNG.

Regardless of which option is chosen, the maritime industry will incur significant operational costs as clean fuels are more expensive. According to the International Maritime Organization (IMO), starting from January 1, 2020, new emission standards will be implemented to limit pollution caused by ships in the world. In the context of moving towards clean energy, IMO prohibits transport vessels using fuel with a sulfur content higher than 0.5%, compared with the current 3.5%. The most commonly used marine fuel has a sulfur content of about 2.7%.

The new rules come from the recommendations of a subcommittee at the United Nations (UN) more than a decade ago and were adopted by IMO in 2016, setting rules for safe, secure, and polluting transport. More than 170 countries, including the US, agreed to sign this new principle.

Vessels found to be in danger of being detained and ports in the Contracting States will monitor these ships.

A new turning point in the history of the oil industry was forecast to have a significant impact on not only crude oil producers, importers, exporters, insurance companies, logistics enterprises, etc.

According to calculations by Macquarie Asset Management Company (Australia) when IMO knows the application of new emission standards to ships, the change of fuel of shipping lines will increase about 30% of sea freight charges.

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