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Liner customers “bewildered” by new low-sulfur fuel charges – FreightWaves

Ocean carriers are confusing their customers again.  This time, it’s the low-sulphur fuel charges which are being put in place before the requirement to use it is mandated.   Each carrier has different charges, with different bases.  The result is confusion about the impact.  Some charges are being billed as “sustainability” charges. That means different things to different customers.  Most of them translate to “higher cost”.  Carriers are using various international indices to measure the changes in contracts, which may or may not relate to the actual extra cost.  And some ships are being fit to use LNG rather than the low-sulfur marine fuel, which is a whole different calculation.

Here’s an example from the article of a typical letter.

Evergreen Lo-sulfur fuel memo

The article finally gets to the bottom line.  Customers are worried that the new charges will be used by the carriers as profit centers rather than just recovering their costs.  the rate rises might go into carriers’ pockets rather than fund sustainability or simple costs.  It’s a reasonable worry, given that fuel surcharges have been used that way in the past by the carriers. Everyone knows the carriers are operating at very thin margins, particularly in the container trade.

It seems like more public relations needs to be done by carriers.  They also need to pay attention to the cost allocation part.  How can they reassure shippers that they won’t be overcharging them?  Cost allocation issues surround many business decisions, and need to be thought through.

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via Liner customers “bewildered” by new low-sulfur fuel charges – FreightWaves

One response to “Liner customers “bewildered” by new low-sulfur fuel charges – FreightWaves

  1. Pingback: Liner customers “bewildered” by new low-sulfur fuel charges – FreightWaves

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