Freight News, Logistics, Sea

Sulphur surcharges not needed or wanted, says FTA

[ November 14, 2019   //   ]

The Freight Transport Association in Northern Ireland says it is concerned over additional shipping surcharges imposed by lines to meet the cost of new sulphur limits in marine fuel, describing them as an old-fashioned hang-over from a previous era. Managing input cost changes is a normal part of business and can be dealt with through fuel cost adjustment factors, or just anticipating the likely cost to come and including it in contract prices.

“Surcharges are a bad response to this change” said policy manager for Northern Ireland, Seamus Leheny. “While the industry has been expecting increased costs as a result of the new rules around low sulphur fuel, a new surcharge mechanism seems unnecessary.  This is the new normal, so shipping companies should be including this in normal commercial pricing arrangements.”

He added “These changes have been known about for a long time and could have been factored into all business plans for 2020.  They are not temporary, nor are they different to what is being done anywhere else in the world.  FTA wants the shipping companies to move away from this approach as quickly as possible as we see no need for this additional charging mechanism.”