CMA CGM has
come out with a quarterly Bunker Adjustment Formula (BAF) to meet the extra
cost it will have to bear to become compliant with the new regulation effective
1st of January 2020.
sulphur fuel it is going to use is expected to be significantly of higher cost
than IFO 380.
In order to
ensure the sustainability & reliability of our services in this challenging
environment, CMA CGM will introduce a new quarterly Bunker Adjustment
Formula (BAF) for long term contracts starting from 1st of January 2019,
says a release giving the key elements of this BAF.
revision, based on IFO 380 bunker average price or LSFO depending on contract
quarterly BAF will be applied for all contracts with a minimum validity of 6
months starting as from January 1st, 2019.
the average tonnage of fuel consumed on Indian Subcontinent & Middle
East-Red Sea/Asia trade, the following quantums will be applied depending on
the fuel price fluctuation.
Below table is only given
as an example of BAF quantums per container size. Official BAF
tariffs for Indian Subcontinent & Middle East-Red Sea/Asia trade will be
communicated later on as per applicable regulations.
figures are based on CMA CGM Fleet deployment on Indian Subcontinent &
Middle East-Red Sea/Asia trade as of Q3 2018.
price is the reference for Indian Subcontinent & Middle East-Red Sea/Asia
Bunker Adjustment Formula. CMA CGM is using one single IFO 380 reference for
all trades, below is the weight of each port worldwide: 40% Rotterdam IF0 380,
50% Singapore IFO 380, 10% Houston IFO 380.
links can be used to monitor IFO 380 variation:
reference change (from IFO 380 to LSFO):
As from the
second half of 2019, to be compliant with the IMO regulations effective on
January 1st, 2020, CMA CGM will start bunkering the new LSFO 0,5% sulfur at a
cost that is unknown for time being. The adjustment falling into 2020 will
therefore be based on the variation between the average cost of one ton of IFO
and the average cost of one ton of LSFO 0.5% at the date of review.