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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
Home » News

Freight association slams 'yet another surcharge' by box carriers

Launches stinging attack, describing sulphur surcharge as 'unjustified and blatant profiteering'.

Image credit: Pixabay CC0

Updated on 20 Sep 2018 00:02 GMT

The British International Freight Association (BIFA) - the trade association for UK freight forwarding and logistics companies - has described the introduction of a so-called "sulphur surcharge" within the container shipping industry as "unjustified and blatant profiteering".

It follows this week's announcement by Maersk that it will be changing the way in which its Bunker Adjustment Factor (BAF) tariff is calculated from January 2019 - one year ahead of the introduction of the 0.5 percent global cap on fuel sulphur content that is set to result in higher bunker costs for buyers switching from high-sulphur to 2020-compliant fuels.

In a statement, BIFA said Maersk's new BAF rates "could lead to prices of a 40 ft container on the Far East to North Europe route being hiked by anywhere between USD 480 to USD 840 (depending on fuel price), or by up to USD 683 (depending on fuel price) from the Far East to US West Coast."

Robert Keen, BIFA Director General, remarked: "By any measure, these are very major increases, and they will be received negatively by BIFA members' customers.

"While the shipping operators may say that the new BAFs are needed to cover the cost of switching to low sulphur fuels or fitting exhaust 'scrubbers', rises of this magnitude are unjustified and could be construed as blatant profiteering by shipping lines determined to exploit the situation."

BIFA also explained that it would prefer any rate increases to be consolidated within freight rates and with any required fluctuation being managed against that figure.

'Yet another surcharge'

"BIFA members are now faced with the task of explaining yet another surcharge to their customers, and what the rationale behind it is. The sulphur surcharge is bound to be extremely unpopular," Keen said.

The UK trade association pointed out that, earlier this year, a number of container shippers - including CMA CGM, Hapag-Lloyd and Maersk - already announced that they would be introducing 'emergency surcharges' in response to rising bunker costs.

BIFA also argued that shipping lines have previously attempted to raise rates by including surcharges for equipment imbalance, peak season and currency, along with other fuel surcharges.

"The latest swingeing increase is only the latest in a series of surcharges imposed by the shipping lines, and BIFA has long campaigned against them," BIFA declared.

"Forwarders do not like shipping line surcharges - we have been challenging, and will continue to challenge their legitimacy on behalf of our members - and their customers," Keen added.

Related Links:

Maersk to change BAF calculation ahead of 2020 sulphur cap
Maersk profitability 'significantly impacted' by higher bunker costs
CMA CGM implements emergency bunker fees
Maersk Line introduces Emergency Bunker Surcharge
Hapag-Lloyd implements emergency bunker fee on 'strong bunker price development'
United Kingdom

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