Poten warns of likely 2020 Worldscale shakeup

Poten warns of likely 2020 Worldscale shakeup

Worldscale is preparing to release its new flat rates for 2019, likely the last year in their current incarnation.

Based on the increase in average fuel prices tanker brokers Poten & Partners are expecting flat rates to increase by 15-20%, a similar change to last year.

“The 2018/2019 change-over may be the last time that Worldscale uses the average price of 3.5% sulphur HFO bunkers in their calculation of flat rates. For 2020, Worldscale may want to base its freight calculations on the fuel that the vast majority of tankers will be using that year, i.e. low sulphur IMO 2020 compliant fuel,” Poten observed in its latest weekly report.

However, if it decides to go that route, Worldscale will face a problem: that fuel – and the associated pricing data – will probably not be widely available until the second half of next year. Worldscale uses the average bunker costs from the beginning of October of the prior year to end September of the current year to establish the bunker cost assumptions for the calculations.

“Worldscale has not reached a definitive agreement on whether, how and when to make the switch, but it is more likely than not that some type of low sulphur bunker fuel will become the de-facto standard in 2020. Charterers will look towards 2020 with some trepidation,” Poten concluded.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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