Freight News, Sea

GSF offers tips to avoid sulphur shipping surcharges

[ January 2, 2020   //   ]

The Global Shippers Forum (GSF) has issued advice for importers and exporters facing demands for surcharges from lines seeking to cover the cost of the new global sulphur shipping limitswhich came into force on 1 January.

GSF’s Top Ten Tips for Sulphur-Surcharged Shippers include:

-Don’t lock in an early rate or consolidate any sulphur surcharges into BAFs. The price of low sulphur fuel oil will fluctuate over time and, with refiners putting more of this product into the market as demand rises, any early peaks in price can be expected to stabilise within a few months and settle around a long-term norm. So, don’t lock-in any surcharge at an early, possibly peak, price and keep an eye on actual fuel costs using a fuel price tracker service.

-Carriers should know to the nearest tonne and tens of dollars what fuel they have bought and used, given its costs. You should therefore expect a prompt and clear answer to your request to show the calculations that lie behind any surcharge demanded of you.

-Most carriers operate in alliances or consortia – effectively vessel sharing agreements, with containers often carried on vessel belong to a different carrier than that for which the booking was made.

-A benchmarking service will give shippers researched and informed estimates about what the additional cost of fuel should be, based on the vessels operated on that route, the chosen methods of compliance and the prevailing costs of fuels. GSF is providing this service for members through partners. #

-Be suspicious if the surcharge imposed looks like an arbitrary figure. There is no single amount or simple percentage for the added cost of using low sulphur fuel, so watch for rounded increases, or predictions that the same costs will apply all year, or in all parts of the world.

GSF secretary general James Hookham, commented: “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.”