Image credit: CMA CGM

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CMA CGM has notified customers that, as a consequence of the higher bunker prices it expects to pay with the implementation of the global 0.5 percent cap on fuel sulphur content in 2020, it will therefore 'inevitably' be reviewing its fuel surcharge policy.

The French boxship operator explained that it has decided to favour the use of 0.5 percent fuel oil for its fleet, whilst also investing in LNG to power nine newbuild container ships and also ordering several scrubber systems.

"All these measures represent a major additional cost estimated, based on current conditions, at an average of 160 USD/TEU," CMA CGM noted.

"This additional cost will be taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis," CMA CGM added.

Mathieu Friedberg, Senior Vice President Commercial Agencies Network, remarked: "The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry. In line with its commitments, the Group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges."

CMA CGM's statement comes just a week after Maersk announced that it will be changing its Bunker Adjustment Factor (BAF) calculation ahead of the 2020 sulphur cap - a decision that was slammed by The British International Freight Association (BIFA), which described the introduction of a so-called "sulphur surcharge" within the container shipping industry as "unjustified and blatant profiteering".

Earlier this year, in June, CMA CGM also introduced 'emergency' bunker fees in response to rising bunker costs.

In its second-quarter financial results, released in September, CMA CGM highlighted the "sharp increase in fuel prices" as the company posted a steep profit decline of $187.8m to $32.8m.