The Global Shippers Forum (GSF) is encouraging ocean freight customers to scrutinise surcharges from shipping lines designed to cover the cost of compliance with the IMO’s sulphur emissions regulations.
January 1, 2020 saw the implementation of the much-anticipated sulphur cap, cutting the allowable sulphur content in marine fuel from 3.5 percent to 0.5 percent. The switch from high-sulphur fuel oil (HSFO) to low-sulphur alternatives has led to an increase in operating costs, which has in turn been passed on to shippers and beneficial cargo owners.
The GSF has encouraged shippers to challenge the basis of any surcharges to make sure they understand what they are being asked to pay extra for, and whether it can be properly explained and justified by carriers.
James Hookham, GSF’s secretary general, explained: “The shipping industry has widely assumed that the costs of cleaning up its environmental act can simply be passed onto its customers (shippers) in the form of surcharges. Whether that will be the case will be the subject of individual negotiations over the coming months.
“However, shippers should be demanding clear and consistent explanations of any surcharges demanded and GSF’s ‘Top Ten Tips for Sulphur-Surcharged Shippers’ reminds our members of the ground rules and to scrutinise carefully any surcharge demands made during contract negotiations”.
He added that the industry needs to “wean itself off of surcharges, just as much as it does high-sulphur fuels” and called for a more mature pricing regime, with confidential contracting and all-inclusive charges becoming the new normal.
“In 2020 the environmental performance of the shipping industry will come under intense scrutiny in the world’s regulatory forums. The IMO low sulphur fuel regulation will be followed by crucial meetings on reducing greenhouse gas emissions and shipping’s carbon footprint. The industry needs to demonstrate a responsible attitude to meeting the costs of its environmental responsibilities to retain the confidence of customers and regulators”.