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Advice for global shippers on managing surcharges for low sulphur fuel

With the introduction of new global rules for limiting sulphur pollution from ships on 1 January 2020, the Global Shippers Forum (GSF) has issued helpful advice for importers and exporters facing demands for surcharges from shipping lines seeking to cover their costs of compliance.

GSF’s ‘Top Ten Tips for Sulphur-Surcharged Shippers’ (attached) highlights the fundamentals of the new rules that all vessels will now be required to meet in all parts of the world. But it also encourages shippers to challenge the basis of any surcharges to make sure they understand exactly what they are being asked to pay extra for, and whether it can be properly explained and justified by carriers.

James Hookham, GSF’s Secretary General, commented:
“With the container shipping industry in a trough of depression, the additional burden of complying with tough new rules on emissions from vessels is a necessary but unwelcome start to 2020. The shipping industry has widely assumed that the costs of cleaning up its environmental act can simply be passed onto its customers (shippers) in the form of surcharges. Whether that will be the case will be the subject of individual negotiations over the coming months. However, shippers should be demanding clear and consistent explanations of any surcharges demanded and GSF’s ‘Top Ten Tips for Sulphur-Surcharged Shippers’ reminds our members of the ground rules and to scrutinise carefully any surcharge demands made during contract negotiations”.

“Ultimately, the industry needs to move on to a more mature pricing regime with confidential contracting and all-inclusive charges becoming the ‘new normal’. The shipping industry needs to wean itself off of surcharges, just as much as it does high-sulphur fuels.”

James Hookham concluded: “In 2020 the environmental performance of the shipping industry will come under intense scrutiny in the world’s regulatory forums. The IMO low sulphur fuel regulation will be followed by crucial meetings on reducing greenhouse gas emissions and shipping’s carbon footprint. The industry needs to demonstrate a responsible attitude to meeting the costs of its environmental responsibilities to retain the confidence of customers and regulators”.


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