ESC calls for ‘dialogue’ over fuel surcharges

msc ship sunset pier

September 25, 2018 - The European Shippers’ Council has become the latest body to voice disapproval of box carriers’ proposed bunker surcharges ahead of the 2020 sulphur cap.

International Maritime Organization legislation will require lines to burn fuel with a maximum 0.5% sulphur content from January 1, 2020, with all compliance options presenting a substantial cost burden.

In a bid to recoup costs, Maersk, CMA CGM and Mediterranean Shipping Co have revealed separate plans to pass on this cost to the customer.

The ESC says that it disapproves of the mechanism of surcharges and calls for carriers to enter dialogue with shippers to “find the best mechanism to share the costs”, coming to an agreement that satisfies both sides. 

“Carriers impose it [surcharges] unilaterally without any negotiation with shippers and ignore a market approach to the global problem,” the ESC said in a circular.

With MSC and CMA CGM following Maersk’s lead it added this does not set an ideal co-operation scenario. 

“Within the new commercial framework of logistics stakeholders, the imposition of bunker surcharges restrains co-operation and lacks transparency,” said the ESC.

The statement continued; “What is most important, it decreases potential innovative solutions and results in a low acceptance by shippers.”  

The shippers’ group says it will continue to monitor the actions of carriers related to bunker surcharges and consequences. 

The ESC’s concerns follow those of the Global Shippers’ Forum and the British International Freight Association, which both relayed strong reservations over the proposed surcharges.

In response, Maersk has rejected accusations of profiteering from the legislation, calling its new pricing strategy fair and nothing more than a means of cost recovery.

Source: Lloyd’s Loading List