Higher bunker prices, along with higher fuel consumption due to the inclusion of Hamburg Süd’s volumes, resulted in a total bunker cost increase of 51% to $5 billion compared to 2017.
Maersk highlighted the ‘significant’ bunker price volatility in 2018, noting that high sulphur fuel in Rotterdam was around $360 per tonne in Q1, peaking at around $480 per tonne in October and closing the year at around $310 per tonne.
‘We did not reach the earnings expectations we had at the beginning of the year, primarily due to the increase in bunker fuel prices having a negative impact during the first half of the year,’ said Maersk CEO, Søren Skou.
Despite the significant rise in fuel costs, Maersk reported improved revenue for the year.
‘In 2018 revenue grew 26% compared to the year before, and our net interest-bearing debt was significantly reduced.’
Unit cost at floating bunker was 7.9% above 2017, which Maersk attributed to a 32% increase in the average bunker price. The company noted that freight rate increases did not absorb the increased bunker prices.
As previously reported, to prepare for the 2020 global cap, Maersk has invested in sufficient supply of compliant 2020 fuels through a long-term agreement with Vopak, making Rotterdam one of the company’s global hubs for low-sulphur bunker fuel.
The company will store some 20% of its total annual fuel requirements and it is also exploring more such options.
Maersk also said it had developed new standard operating procedures to ensure that the new, blended, compliant fuels will not cause operational problems.
In 2018, Maersk also invested in scrubbers on a share of the company’s vessels, however the company said the technology is a ‘less extensive element of our sulphur cap fuel sourcing strategy’, confirming that ‘the vast majority of our container vessels will comply using low sulphur fuels’.
Maersk said: ‘In 2017, we publicly stated that we would not rely on this technology, but for the time being we need to secure that we are not overly reliant on a single means of compliance.’
However, a greater move towards exhaust gas cleaning systems (EGCS) seems unlikely at this stage. Indeed, the company seems to have gone cold on the idea of scrubbers ever since it abandoned a trial involving the technology and Quadrise Fuels International’s MSAR fuel in 2017.
In a press event today (21 February), Skou told Danish news outlet Shippingwatch that using scrubbers was ‘a foolish idea’, adding that the technology is ‘industrialising a pollution process’.