EMEA News
DFDS Estimates Low Sulphur Surcharge to Raise Freight Rates 15%
Danish freight operator DFDS Seaways is predicting that the Low Sulphur Surcharge it is set to introduce will raise European ferry freight rates by around 15 percent, Lloyd's Loading List reports.
The company said that it had included the extra costs incurred from switching to marine gas oil on each route in the calculation, along with factors such as route distance, speed, capacity, utilisation, and type of ship.
The new year is expected to see many companies switching to marine gas oil as emission control area (ECA) regulations take effect, which will limit sulphur content in marine fuel used in ECAs to no more than 0.10 percent by weight.
Alternatively, companies also have the option of using alternate low sulfur fuels such as liquefied natural gas (LNG) or installing an equivalent method of compliance such as scrubbers to clean emissions.
Sweden-based Stena Line is also expecting the freight side of its business to raise prices by 15 percent.
CEO Carl-Johan Hagman had previously said that "this is one of the largest negative political decisions taken since tax-free shopping was discontinued."
A spokesman for British operater P&O Ferries said that the increased charges may give incentive for freight customers to turn to other modes of transport, such as trucking cargo in place of on ships.
"Eurotunnel is sitting pretty in all of this as obviously its truck shuttle services are not affected by the low-sulphur rules and the commercial advantage could generate new business," he said.
P&O Ferries previously announced that ECA regulations would increase its fuel costs by £30 million ($48.2 million) per year.
