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Drewy survey: Widespread concern on lack of fuel cost transparency

56% of respondents say they did not consider service providers’ existing approaches as either fair or transparent.

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A survey conducted by independent maritime research consultancy has found considerable unease among global shippers/BCOs (Beneficial Cargo Owners) and freight forwarders ahead of the IMO’s 2020 global emissions regulations, due to come into force on 1 January 2020. 

Particular uncertainty and concern was expressed by respondents in both the survey and follow-up interviews about carriers’ methods of fuel cost recovery with more than half of all respondents (56%) stating that they did not consider their service providers’ existing approaches as either fair or transparent. Further to this, 4 in every 5 of the shippers/BCOs participating in the survey stated that they had yet to receive clarity from their providers as to how the widely anticipated future fuel cost increases, set to accompany the 2020 regulatory change, would be met.

Despite the significance of the change and the high press and media profile given to the subject in recent months, a surprisingly large proportion (33%) of respondents to the Drewry survey admitted to having poor or very poor awareness and understanding of the new regulation.

In Drewry’s view, the level of uncertainty today as to the total cost impact is so large that nobody is able to provide a confident forecast of the cost of compliance; the only certainty is that the extra cost will run into billions of dollars globally come 2020. Based on independent “futures” prices, low-sulphur marine fuel prices per tonne will be 55% higher than current high-sulphur fuels and Drewry considers that the probable “worst case” scenario is that fuel costs (paid by carriers) and fuel surcharges (paid by shippers) in global container shipping will increase by 55-60% in January 2020.

“At Drewry we are always keen to listen to the concerns of the market and help facilitate dialogue between stakeholders on complex subjects of common interest like the IMO rule,” said Philip Damas, Head of Drewry Supply Chain Advisors.

“The IMO low-sulphur rule change represents a very significant, industry-wide, change event which will likely have far reaching effects on the global shipping industry for many years to come”, continued Damas. “Given the scale of the extra costs triggered by the new regulation and the carriers’ expectations that their pricing and fuel charge mechanism with customers must be restructured, there is a need for carriers to address the transparency concerns expressed by their customers.”

In cooperation with both shipper members of the Drewry Benchmarking Club, and possibly carriers as well, Drewry is working on an IMO low-sulphur rule ‘cost impact tool’ based on robust market data. Fuel surcharges are one of the largest components of container freight costs and, based on Drewry Benchmarking Club data, typically average $150/teu on the major routes from Asia today.

Survey Respondent Profile

  • 106 survey responses. 15 follow-up (30 min) interviews with shippers/BCOs.
  • 62% shippers and 38% freight forwarders. 67% of shippers moving >10,000 TEU per annum.
  • Respondent role profile: Category and ocean freight procurement executives (55%), Global logistics managers (25%), Senior logistics executives (10%)

Summary Findings
Poor awareness and understanding

  • A surprisingly large proportion (33%) of respondents expressed poor awareness and understanding of the new regulation.
  • More than half of all respondents had not received formal guidance on the pending changes from either the IMO or their national administration/transport ministry

 Lack of preparation

  • More than half of all respondents (52%) feel either ‘not prepared’ or ‘not at all prepared’ for the impact of the new IMO emissions regulations.
  • Only 14% of respondents have conducted an impact assessment, only 1 in 10 of shippers (importers/exporters) responding to the survey have conducted such an assessment

 Cost impact concerns and considerable uncertainty

  • 22% of all respondents believe the cost impact to their organisation from the new regulation will be either significant (16%) or extremely significant (6%)

 Lack of transparency in fuel cost recovery methods

  • More than half of all respondents (56%) do not believe the current methods of fuel cost recovery are sufficiently fair and transparent
  • 76% of respondents had not received clarification or information from their provider as to how they intend covering potential cost increases from the regulation.
  • 4 in every 5 of the shipper/BCO respondents had not received such clarity from their providers.

Source: Drewy
Photo credit: Drewy
Published: 15 October, 2018

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Ammonia

AM Green plans to build green ammonia plant at Indian port

Initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes, says VOC Port Authority.

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VO Chidambaranar (VOC) Port Authority on Friday (29 May) said it has signed a Memorandum of Understanding (MoU) with India’s ammonia producer AM Green Ammonia to collaborate in the development of a green ammonia production plant.

The plant will have a capacity of one million tonnes per annum (MTPA) at Tuticorin.

The initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes. 

The project is expected to support the development of green fuel corridors connecting VOC Port with major ports in Europe and Asia, thereby strengthening India’s position in the global green fuels value chain.

VOC Port also signed a Memorandum of Understanding (MoU) with Bureau Veritas (India) Pvt. Ltd., to collaborate on Green Port certification, emissions accounting, ESG reporting, safety validation, development of green bunkering practices, and establishment of a Centre of Excellence for green fuels and sustainability.

The port also plans for an upcoming 750 m³ green methanol bunkering facility.

 

Photo credit: Naveed Ahmed on Unsplash
Published: 3 June, 2026

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Port & Regulatory

Study: Major drop in ship sulphur emissions confirmed following IMO regulations

National Centre for Atmospheric Science study found that the average sulphur content in ship fuel dropped nearly tenfold in open ocean areas following IMO’s 2020 regulation.

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Recent global regulations have significantly reduced sulphur emissions from ships, helping to improve air quality in coastal regions – confirmed by a recent international study led by researchers at the National Centre for Atmospheric Science. 

The research, published in Environmental Science: Atmospheres, used aircraft and ground-based instruments to measure sulphur dioxide and nitrogen oxides emitted by ships in the North-East Atlantic and European coastal waters between 2019 and 2023.

The team found that the average sulphur content in ship fuel dropped nearly tenfold in open ocean areas following the International Maritime Organization’s 2020 regulation, which capped sulphur content in marine fuel at 0.5%. 

Before the change, many ships exceeded the previous 3.5% limit. After 2020, only a small number of ships were found to breach the new standard.

In European sulphur Emission Control Areas (SECAs), such as the English Channel and the Port of Tyne, sulphur levels were even lower – well below the stricter 0.1% limit. Interestingly, ports outside these zones, like Valencia in Spain, also showed low sulphur levels, likely due to EU rules requiring cleaner fuel when ships are docked for extended periods.

This is the first study to use aircraft-based measurements and predictions from the Ship Traffic Emission Assessment Model (STEAM3) to assess ship emissions outside of sulphur control zones since the 2020 regulation came into effect. The findings support the widely held view that ships now emit around seven times less sulphur than before the rule change – an important step toward cleaner air and healthier coastal environments.

Note: The research, titled ‘SO2 and NOx emissions from ships in North-East Atlantic waters: in situ measurements and comparison with an emission model’ can be found here. 

 

Photo credit: shraga kopstein on Unsplash
Published: 8 December, 2025

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Interview

IBIA Annual Convention 2025: ‘Exciting times’ for post IMO 2020 bunker suppliers, states Equatorial

Choong Sheen Mao, Chief Operating Officer, Equatorial, describes to Manifold Times the pre/post IMO 2020 challenges and evolution of bunker suppliers.

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The International Bunkering Industry Association (IBIA) will be hosting its flagship Annual Convention in Hong Kong at the Hong Kong Convention Exhibition & Convention Centre between 18 to 20 November 2025, as part of Hong Kong Maritime Week.

Choong Sheen Mao, Chief Operating Officer, Equatorial Marine Fuel Management Services (Equatorial), speaks to bunkering publication Manifold Times about the challenges of a post IMO 2020 bunker supplier.

MT: How does Equatorial continue to offer customer assurance and maintenance of marine fuel quality to ISO8217 standards despite increasing complexity of bunker fuel blends?

We maintain our focus to provide compliant, quality and competitively priced products to our customers. There is no shortcut. We source our products from a wide range of cargo producers and suppliers. We continue to be strict and vigilant with our testing programme for our products before delivering them to our customers. Equatorial has deepened our engagement with the wider industry to have a better and up-to-date understanding of the existing and new marine fuels.

MT: Can you share the evolution of commercial marine fuel procurement, blending and trading strategies on the back of increasing fuel types (pre/post IMO 2020)?

Pre IMO 2020, the main types of marine fuel procured and consumed by vessels were high-sulphur fuel oil, marine diesel oil and marine gas oil. Trading strategies were therefore closely linked to that within the oil industry.

However, many of the new fuel types are from other industries. For example, biofuels, methanol and ammonia are mainly products from the chemical and agriculture industries. There are marked differences between these industries and the energy industry (in particular, the marine fuels industry). LNG is from the gas industry which is distinct from the oil industry.

Without an existing liquid paper market for many of these commodities (especially as a marine fuel), the price risk management is less straightforward. Furthermore, commodity prices are no longer the sole consideration for price itself. The price of compliance must be considered. This could range from guaranteeing the origin of the marine fuel, its sulphur properties as well as its carbon intensity. The list goes on.

MT: Operational wise, what are the changing role and responsibilities of a bunker supplier to date, compared to before IMO 2020?

The role and responsibility of a bunker supplier have evolved. Fundamentally, it has been about providing quality marine fuels at competitive prices. Quantity assurance has been a critical concern which led to the mandatory implementation of the mass flow meter system for bunkering in the Port of Singapore. Interestingly, due to the nature of credit terms in the bunker industry, bunker suppliers also performed the role of “bankers” by extending favourable credit terms to shipowners and charterers.

These days, post IMO 2020, things have become even more complicated. Today, a bunker supplier retains the abovementioned roles and responsibilities, and much more – it has to ensure compliance with a plethora of rules and regulations. Compliance not only with sulphur cap requirements, but with international and regional sanctions and restrictions unrelated to the quality of the marine fuel itself. In fact, especially with alternative low- and zero-carbon marine fuels, this means compliance with standards, rules and regulations on sustainability such as the European Renewable Energy Directive and/or International Sustainability and Carbon Certification. There is also the need to comply with increasingly stringent safety regulations on both conventional and alternative marine fuels.

In addition to the above, a post IMO 2020 bunker supplier is still expected to supply compliant and quality fuel at competitive prices.

MT: Equatorial is Singapore’s largest local-born supplier; what is the next big thing for the company?

Equatorial continues to adapt and improve with the times, while maintaining its core values – Integrity, Teamwork, Commitment, Proficiency and Quality, and Safety and Environment. The bunker industry is a highly competitive one, and it is our intention to keep our competitive edge and remain relevant. This means that we have had to step out of our comfort zone and embrace the two mega trends of our time – digitalisation and decarbonisation.

We have been early adopters and developers of the electronic bunkering note as part of our own digital bunkering efforts. We have diversified our product offering to include low carbon marine fuels and are proud to be one of the pioneers for bunkering B100 biofuels earlier this year. This was made possible by the arrival of our IMO Type II chemical and oil bunker tankers. These same bunker tankers are also capable for carrying and delivering methanol. Equatorial has invested in an LNG bunkering vessel (LBV) newbuilding that is set to be delivered in Q3 2027. We are also involved in a study to develop low- or zero-carbon ammonia bunkering in Singapore.

These are exciting times.

Note: Choong Sheen Mao is amongst panellists featured in ‘Session Three: Bunker Sellers Panel’ at the IBIA Annual Convention 2025.

Join the Conversation

With over 300 delegates expected, the IBIA Annual Convention 2025 is set to be a defining moment for the marine fuels industry. Registration is now open via the IBIA Annual Convention website.

 

Photo credit: Manifold Times
Published: 31 October 2025

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