Hapag-Lloyd details sulphur cap surcharge

Hapag-Lloyd details sulphur cap surcharge

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establishing a customer friendly solution for the calculation of fuel costs and a clear improvement with regards to the outdated approaches that are practiced in the industry,” Hapag-Lloyd said in a release.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.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

Related Posts

1 Comment

  1. Hans-Henrik Hansen
    October 9, 2018 at 5:52 pm

    Dear Splash / Jason,

    Could you ask HLL to elaborate on the quote you have in your article. More specifically:

    1) How is it customer friendly to complicate the calcuation and involve elements that the customer have no influence on? And how can this ever become transparent?
    2) How is it a ‘clear improvement’ that more of the carrier risks are transferred to the customers?
    3) What is HLL doing to address their business risks, e.g. fuel hedging, optimise utilisation, introduce new technology to reduce costs, etc, rather than just passing the additional costs to their customers?