"Urgent Need" for Box Shippers to Announce Low Sulfur Surcharges

Fuel surcharges are likely to hit the Baltic region the hardest. 

As the deadline for the implementation of Emission Control Areas (ECAs) draws closer, shippers have become increasingly worried over the lack of information on low-sulfur surcharges coming from carriers, The Loadstar reports. 

“With one or two notable exceptions, few shipping lines have yet provided information to their customers on their low-sulphur fuel strategies and the extra cost to be passed on to shippers via increased rates or bunker surcharges," said Global Shippers’ Forum secretary general Chris Welsh.

"With shippers under pressure to finalize freight budgets for 2015, this information is urgently required by customers.”

So far, only Maersk Line, Mediterranean Shipping Company (MSC) and CMA CGM have released details on their charges, while Orient Overseas Container Line (OOCL) has given information on its trans-Atlantic routes only. 

The Transpacific Stabilization Agreement (TSA) announced earlier this year that its member carriers would implement a sulfur fuel surcharge in order to offset higher fuel prices prompted by ECAs.

ECAs are set to come into effect January 2015, and will limit sulfur content in marine fuel used in ECAs to 0.10 percent by weight or lower.

For many companies, the dominant solution has been switching to marine gas oil (MGO), which although is costlier, is not nearly as expensive as investing in liquefied natural gas (LNG) or scrubber technology. 

So far, shipping in the Baltic region will be the hardest hit by the fuel surcharge,while Asia to North Europe routes will be least affected. 

The TSA has also expressed its worries over whether the current supply of compliant fuel will be enough to meet the abrupt increase in demand beginning next year.