Fuel transition charges flood in

Fuel transition charges flood in

Containerlines are following Hapag-Lloyd’s lead in bringing in low sulphur fuel surcharges for spot cargoes to go alongside already communicated longer term charges to handle the global sulphur cap.

Late last month the German boxline outlined that from December 1, a new IMO 2020 Transition Charge (ITC) will kick in, valid until further notice, with customers charged an extra $135 per teu on Asia-Europe, $130 on the transpacific and $80 on intra-Asia trades.

France’s CMA CGM has introduced its own Low Sulphur Surcharge (LSS20) effective from the start of next month which is working on a $200 per ton differential with the new fuels. CMA CGM has slapped a $120 per teu charge on boxes heading from Asia to North Europe, $108 per teu on the transpacific and $70 per teu on intra-Asia trades.

Maersk has also come up with a new Environmental Fuel Fee (EFF) effective from the same date for all spot business and contracts with validity up to three months, although it has not made public the amount it will be charging.

Maersk subsidiary Hamburg Süd this week also detailed its own Environmental Fuel Fee (EFF) starting December 1.

Hamburg Süd’s EFF tariffs have been calculated using the price difference between high sulphur fuel and low sulphur fuel. The difference calculated is at $193.08 per ton. Hamburg Süd’s tariffs work out at $169 per teu on the transpacific, $72 for intra-Asia boxes while Asia to North Europe is unclear, boxes bound for the Mediterranean will incur a $116 extra charge.

Commenting on the slew of new charges, Andy Lane from CTI Consultancy in Singapore told Splash the tariffs were inevitable, but would likely pass quickly.

“I suspect that the clouds will pass quickly and a new normal – maybe not materially different from the old – will prevail. It is an unavoidable transition that needs to be passed through, and will ensure plenty of overtime for the analysts,” Lane said.

Other containerlines are expected to communicate their spot fuel surcharges in the coming fortnight.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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1 Comment

  1. Avatar
    M.T. Vassel
    November 12, 2019 at 4:51 am

    “I suspect that the clouds will pass quickly and a new normal – maybe not materially different from the old – will prevail. It is an unavoidable transition that needs to be passed through …”

    Isn’t that what was said about the THC in the early 90s?