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Forwarders lash out over container line sulphur surcharges

British freight forwarders and logistics companies are up in arms over container line sulphur surcharges ahead of the 2020 sulphur cap describing them as “blatant profiteering”.

The British International Freight Association (BIFA) voiced its concerns about the charges following the annoucement earlier this week by Maersk Line that it would be introducing a new Bunker Adjustment Factor (BAF) from 1 January 2019 to take into account the additonal cost of low sulphur fuels. For the Asia – Europe trade examples given by Maersk showed a surcharge of $480 to $840 per feu.

Read more: Maersk Line in new fuel surcharge to recover $2bn in extra costs from 2020 sulphur cap

Robert Keen, BIFA director general said: “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.”

Surcharges have long been unpopular with shippers but with container lines facing an estimated $15bn additional fuel bill to comply with the sulphur cap the Maersk BAF annoucement looks set to be the first of many. Senior officials from Ocean Network Express (ONE), Orient Overseas International Ltd (OOIL), and APL all said this week that the additional costs of meeting the 0.5% global sulphur cap on marine fuel would have to be passed onto customers.

Read more: ONE, OOCL and APL say shippers must pay additional costs of sulphur cap

BIFA said that it would prefer that bunker surcharges were consolidated into freight rates.

Keen added: “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. 
“Sometimes there is an unfair perception that our members are to blame.” 

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