Danish shipping company
needs to reconsider its plan to introduce new fuel surcharge arrangements from
January 1, 2019, the Global Shippers Forum (GSF) believes.
Earlier this month,
Maersk Line said it will change fuel adjustment surcharge to
recover presumed costs from the introduction of low-sulphur marine fuel
from January 1, 2020.
The new charges, which
are additional to agreed contract rates, are based on two factors – an average
cost of fuel and a ‘trade factor’ that upscales the costs on head trades and
discounts the fuel cost on reverse trades. But because the charge is per box,
the greater number of revenue-earning boxes sailing west will collectively pay
far more than they need to in order to compensate for the same boxes returning
east when empty, according to GSF.
As explained, this has
the effect of applying higher than average surcharges on the company’s most
profitable routes. For example, the Far East to North Europe route has a trade
factor of 1.3, but North Europe to Far East of 0.7.
In addition, the new
measure comes twelve months before the rules related to the use of surcharges
actually come in. What is more, the new charging structure would apply to all
variations of fuel price.
customers to contribute to new environmental costs is to be expected, but this
charge lacks transparency; no data is available to let customers work out how
the charge has been calculated. Given historical experiences with surcharges,
shippers are naturally suspicious over something shipping lines say is ‘fair,
transparent and clear’. GSF will be taking this piece of financial engineering
apart piece by piece as we suspect this has more to do with rate restoration
than environmental conservation,” James Hookham, GSF Secretary General, said.
has other options. Global rules allow lines to meet air quality standards by
fitting ‘scrubbers’ to clean up exhaust emissions, rather than buying more
expensive low-sulphur fuel. This requires a one-off capital expense, but for
shippers this is a better option than paying sulphur surcharges indefinitely.
Some of Maersk’s biggest competitors are taking this different approach, and
customers will be looking at the options and voting with their wallets,” Hookham continued.
He also reflected on the
lack of negotiation about the timing and the structure of the charge.
suspect that other shipping lines will be tempted to follow suit, but it would
surely be of concern to competition authorities around the world if the same
formula were to be used by other shipping lines, especially in the same
alliance,” Hookham further said.