EMEA News
Customers Should Be Aware of Low Sulfur Bunker Costs: Hapag Lloyd
Hapag-Lloyd is warning shippers using container carrier lines to be aware of the increase in surcharges that will be likely in contracts dealing with voyages in Emissions Control Areas (ECAs) in 2015 as the carriers deal with new low sulfur fuel (LSF) requirements, industry news site ShippingWatch reports.
Few carriers seem to have informed customers of the financial consequences of the new regulation, the German carrier says.
"We're surprised that so few have made announcements concerning these consequences, especially seeing as the contract negotiation season for the US is starting now," a Hapag-Lloyd source said.
"And as the annual contracts for the major US customers will typically run from May 1st 2014 to May 1st 2015, these contracts apply to a considerable part of 2015.
"So we're not looking at a situation that concerns something one year into the future. We're looking at just a few months."
Hapag-Lloyd, which has issued three statements since November informing customers of an increase in fuel costs, said the company expects to pay $270 million extra annually to meet the regulations.
Bunker companies expect 0.1 percent sulfur marine gas oil (MG) to cost about 50 percent more than fuel used now.
"For all freight rates with a validity into 2015, customers will have to amend their bunker formulas to cover the increasing costs for low sulphur fuel," Hapag-Lloyd said in a November statement.
"Otherwise, Hapag-Lloyd reserves the right to charge an increased LSF surcharge separately once all cost components are confirmed."
Danish ferry operator Bornholmstrafikken A/S recently announced it would switch to more expensive low-sulfur distillate fuel rather than install scrubbers in preparation for the new ECA rules.
