Shippers are getting 2019 off to a pricey start as rates rise, surcharges are levied, and carriers begin to implement the new low-sulfur fuel formulas.

Carriers are hitting the container shipping market with a wave of surcharges on trades from Asia to North Europe and the Mediterranean to support a late December spot rate rally and maintain the higher prices into the peak period before Chinese New Year.

The higher prices are also coming at the same time as carriers start to phase in their revised bunker adjustment factors (BAFs) from this month in preparation for a global 0.5 percent sulfur cap on marine fuel that will be imposed from Jan. 1, 2020, by the International Maritime Organization.

Carriers are committed to passing on the $11-15 billion that the low-sulfur mandate is expected to add to their annual fuel bill through their various fuel recovery formulas, and according to online marketplace Freightos, shippers will feel the impact almost immediately.

Philip von Mecklenburg-Blumenthal, vice president of FBX at Freightos, said so far the market has seen recalculated BAFs, emergency bunker surcharges increases, and now new low-sulfur surcharges.

“These increases, beginning Jan. 1, will filter through next week [Week 2] with price rises in the 5-10 percent range, depending upon trade lane,” he said.

   Hapag-Lloyd has informed customers of the low-sulfur charges it will levy on a host of trades from Feb. 1 via its new Marine Fuel Recovery (MFR) mechanism. For instance, the East Asia-South Europe MFR will be $231 per TEU in both directions, while the North Europe-Indian Subcontinent MFR charge will be $147 per TEU heading both east and west.

  CMA CGM expects the low-sulfur fuel consumption from 2020 will raise per-TEU cost by $160, while Maersk Line estimates its BAF will add between $90 and $1,050 to the cost per FEU.