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            august 26, 2019

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Shippers told to be ready to resist 'premature' low-sulphur surcharges


Shippers have been warned to brace themselves for fuel surcharges that may come as early as October from ocean carriers to help pay for the higher cost of the UN's low sulphur fuel rule that kicks in January 1.
Price impacts of the UN's International Maritime Organisation's (IMO) mandate will be "quite large," ranging anywhere from US$200 per to $400 per TEU, said Mohawk Global Logistics vice president Rich Roche, reported American Shipper.
Speaking during the National Customs Brokers and Forwarders Association of America (NCBFAA) Annual Conference in San Antonio, Mr Roche advised delegates to challenge carriers if they claim they will start burning fuel before the January 1.
"They don't have to burn it, even though they're bringing it on board the vessels," Mr Roche said. "Don't let anyone fool you that just because it's on board means they're burning it. They have many tanks where they put the fuel on vessels, and they're actually storing it until they have to burn it."
"There's a lot of variables that will go along with the calculation, and all of those variables are going to be specific by carrier, because they're all coming up with their own formula," Mr Roche said. "Some of that's quite subjective. So, it's one of those things you need to be prepared for."
AlixPartners estimated that container carriers would have to increase their bunker adjustment factors by 40 per cent or $270 per FEU on Asia-to-Europe services and by 33 per cent or $150 per FEU on eastbound transpacific services to maintain margins when they shift to low-sulphur fuel.

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