Huge redundancies at Maersk. Is this the cost of cleaner fuels?
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The Danish shipowner Maersk will reduce employment in the coming months, according to information from the Wall Street Journal. For now, the actual extent of the redundancies is not known, but Western European analysts suppose that about two hundred people will lose their jobs.
The cuts are to cover, among others, the crew at the company’s headquarters in Copenhagen, but also the branch in Hamburg. All this will happen at a time when the global shipping giant intends to expand its operations with additional logistics services, especially in inland transport, storage and customs services. Soren Skou, CEO of Maersk, recently talked about plans to invest hundreds of millions of dollars in the development of inland logistics services.
The reason for the cuts is the need to reduce the company’s overall costs, which is related to, among others with rising fuel prices. Analysts link this to the provisions of the International Convention for the Prevention of Pollution from Ships (IMO 2020) coming into force on 1 January 2020. It obliges ocean shipowners to use marine fuels with a limited sulfur content (reduction of the current content of 3.5% to a maximum of 0.5%). The goal of IMO 2020 implementation is to reduce air pollution caused by sulfur emissions by about 70 % on a global scale until 2025.
For Maersk and other ocean carriers, cleaner fuels can mean an average increase in fuel bills of up to 25 %.
Photo: Wikimedia/Artur Andrzej CC SA 3.0