German shipping line Hapag-Lloyd has announced that it will introduce a sulphur surcharge mechanism in preparation for the upcoming IMO environmental regulations on sulphur emissions.
The Marine Fuel Recovery (MFR) mechanism, which will be launched on Janaury 1 2019, will take into account various parameters, such as the vessel consumption per day, fuel type and market price, sea and port delays and carried teu.
According to the company, it has developed a system that enables a calculation of costs for customers that is causal, transparent and easy to understand and the MFR will be reviewed quarterly or monthly in case fuel price fluctuations are above $45 per tonne.
Hapag-Lloyd estimates the transition to low sulphur fuel will cost it $1bn in additional costs in the first year.
“We aim for establishing a customer friendly solution for the calculation of fuel costs and a clear improvement with regards to the outdated approaches that are practiced in the industry,” Hapag-Lloyd said in a release.
Last month, MSC and CMA CGM all followed Maersk’s lead in introducing surcharges to get customers to pay for their sulphur cap compliance.
Shippers have reacted with typical fury, claiming the surcharges lack transparency and need greater dialogue between carriers and customers.