The results of a pre-IMO 2020 survey by Xeneta show that neither the carriers nor the shippers and forwarders know the impact that IMO 2020 will have on their business.
Xeneta, an ocean and air freight rate benchmarking and market analytics platform, said the results of the poll it ran a few weeks ago on the shipping industry’s readiness for IMO 2020 brought to the fore the uncertainty felt among carriers, while shippers/forwarders said they expect to be able to pass the upcoming surcharges on to their clients.
“Carriers are uncertain; some are buying spot while others have long-term supply locked-in. Shippers/forwarders expect to be able to pass the upcoming surcharges to their clients, but we note these same clients have yet to see an IMO 2020 surcharge added to an invoice,” Xeneta said in a release on January 6.
The survey found that all but one shipper have been formally advised to expect surcharges. The shippers reported that surcharges would be announced by the carriers on a schedule ranging from monthly to quarterly to annually.
All the shippers said they “can/will pass the surcharges on to their clients.”
Moreover, all respondents said they would do nothing differently now as compared to when IMO 2020 was first announced in October 2016, and only one-third of respondents think that they’re correctly positioned to deal with IMO 2020, while the rest did not respond.
On the positive side, none of the slow-steaming and expected IMO 2020 costs make any of the respondents want to abandon international trade and “re-shore” their manufacturing or sourcing. This as 95% of shippers/forwarders said “no” to the query: Will slow steaming, IMO surcharges, etc. make shippers/forwarders reconsider sourcing and manufacturing in Asia/Latin America and re-sourcing into US-EU?
“The net-net is that neither the carriers nor shippers/forwarders know the effects IMO 2020 will have on their business models,” said the report.
The respondents came from all segments of the industry, from carrier senior-level management to multiple levels of management in the forwarder and shipper segment. Xeneta defined “carrier” as vessel or fleet owner/lessor, and “shipper” as traders, BCOs, NVOCCs, exporters-importers, and agents.
The demographics roughly mirrored the box ship industry, which has more shippers/forwarders than carriers. 21.4% of the respondents were carriers, with 78.6% shippers-forwarders.
Image by Markus Distelrath from Pixabay
