BRi Global News - USA - Rising Low-Sulphur Fuel Price Could Spur Scrubber Resurgence and Finding Cargo Space on Air Freighters a Challenge


Dear all Valued Customers


A widening spread between prices for low- and high-sulphur bunker fuel is lowering operating costs for ocean carriers that have equipped ships with sulphur scrubbers, according to data from shipping association BIMCO, which foresees more new ships hitting the water with scrubbers thanks to the cost savings.


Scrubbers allow ocean vessels to continue burning cheaper high-sulphur fuel oil (HSFO) while still meeting the International Maritime Organization’s (IMO's) mandate to reduce global sulphur emissions from shipping that went into force Jan. 1, 2020. But the COVID-19 collapse in oil prices last year sent the price spread between the two types of fuels to new lows, making the economics of using scrubbers less viable.


Finding Cargo Space on Air Freighters a Challenge


Air cargo analysts say extremely tight capacity and elevated freight rates are here to stay for the rest of the year, with none of the usual doldrums until the fall holiday rush. Finding aircraft with cargo slots is a big challenge all over the world - not just on the major trade lanes connecting China, North America and Europe - as volatility and uncertainty continue.


High retail and industrial demand for shipping is putting pressure on the international airfreight sector, which is still about 20% below normal capacity because passenger jet traffic is heavily restricted.


While Chinese factory production slowed coming out of the Lunar New Year holiday, the price dip and slight capacity influx appear to be temporary.


Experts say rates are starting to climb again out of Shanghai and Shenzhen and likely will trend up the rest of the month.


Short-term market softness belies the fact that rates are still two to three times higher than historical standards and transport supply is very low.


Labour Ruling Cuts Chances of Federal Intervention in Montreal Port Dispute


An industrial relations tribunal in Canada has dismissed a complaint by Montreal waterfront employers alleging longshore union workers were negotiating in bad faith, reducing the chances of federal intervention if the union votes Sunday against a proposed new contract.


Had the Canada Industrial Relations Board (CIRB) sided with the employers, it would have strengthened the latter’s case that the federal government should neuter the union’s ability to strike, according to three Montreal shipping executives familiar with negotiations who asked not to be identified. The union’s 1,125 longshore members will vote on the latest contract offer from employers Sunday, the same day in which the eight-month truce expires.


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As a valued customer, we hope that you will continue to trust us to source the best options for your supply chain needs now and into the future. Should you have any questions regarding this news, please contact your Customer Solutions Representative.


Keeping you updated,

BRi Customer Solutions Team

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