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September 30 2019

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10 The Journal of Commerce | September 30 2019 Cover Story the traditional heavy fuel oil from their ships' engines — or install compliant emission-cleaning scrubbers — before they can begin burning low-sulfur fuel oil (LSFO) or marine gasoil (MGO). With time running short and little to no liquidity in LSFO markets, carri- ers in the major east-west trades have begun testing the waters, releasing possible ranges for the interim bunker adjustment fees they intend to charge in November and December. for low-sulfur bunker fuel has made it all but impossible to predict the price carriers will pay at the pump. According to various industry estimates, the Inter- national Maritime Organization (IMO) rule, which reduces the maximum allowable sulfur level for ocean vessels from 3.5 percent to 0.5 percent, will add $10 to $15 billion to carriers' annual fuel spend. Although the mandate does not officially go into effect until Jan. 1, 2020, carriers need time to flush out INTERIM SURCHARGES FOR low-sulfur fuel that container lines will impose in the next few months will give cargo owners their first real piece of the puzzle when it comes to just how much their bottom lines will be impacted by the looming IMO 2020 mandate. Carriers have been signaling for the better part of the last year that they will have to pass these costs on to their ship- per customers, but a lack of demand

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