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© Dmitry Pichugin

The imposition of emergency bunker surcharges looks set to pitch container shipping lines into direct conflict with their shipper and 3PL customers.

And one shipper group wants far greater transparency from box carriers.

Last week, MSC announced emergency bunker surcharges (EBSs) on its services, Maersk and CMA-CGM following suit, and sources have told The Loadstar the carriers appear intent on taking a hard line to collect the tariffs.

One forwarder said: “Despite discussions with the carriers in relation to commitments we have in place, we are being advised by all carriers implementing the charge that this is non-negotiable and will be added to all invoices from the relevant start dates [non-FMC, 1 June and FMC, 1 July].

“We have also had feedback from some of our customers who have direct contracts with these carriers that they are being advised the same.”

Meanwhile, secretary general of the Global Shippers Forum Chris Welsh said carriers needed to “fess up” and take responsibility for their cost structures rather than announcing “vaguely explained, short-notice” surcharges.

He said: “The imposition of [EBS] has no place in a modern shipping where costs and prices should be mutually agreed between [parties], preferably in mutually agreed service contracts.

“Such arrangements enable the parties to build long-term business partnerships, as well as providing clarity on the terms and conditions for the services provided and for appropriate remuneration.”

Mr Welsh said carriers needed to not only provide “full transparency”, as far as surcharges were concerned, but also explain how they were warranted on top of existing surcharge mechanisms.

The senior manager for container research at Drewry, Simon Heaney, echoed Mr Welsh and told The Loadstar the imposition of EBS was “arcane”.

He added: “It is also highly prone to irk shippers, so it probably is time to come up with a more transparent system that satisfies all parties. Unfortunately, the issue only arises when fuel spikes sharply, as it has recently. When oil is low, there’s little interest in the issue so it’s no surprise we revisit this topic every so often.”

In a previous interview, Mr Heaney said that larger shippers would likely be able to avoid the additional costs, having negotiated such eventualities into their contracts.

“Of course, how they are implemented will often depend on the carriers’ customer mix, with higher volume shippers likely getting a free pass,” he continued. “But the smaller shippers won’t get any sort of free pass as far as the steep rise in fuel prices are concerned, with these costs passed on to them.”

This point was reinforced in a scathing LinkedIn blog published yesterday by vice-president of global logistics at Electrolux, Bjorn Vang Jensen. Despite expressing sympathy for the carriers’ “challenges”, he said both parties entered contracts with “eyes wide open”.

“There is a risk attached to doing business, which we accept and which we expect that our suppliers accept too,” he added. “I’d love to see carriers’ reaction if we wrote a mass mail along the lines of, ‘due to recent increases in steel prices, we hereby arbitrarily decrease the freight rates by 20%, effective immediately’.

“To date, we have not been directly approached. Any carrier tempted to come to me directly now knows what to expect. Good luck.”

COMMENTS 1


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  • Gary Ferrulli

    May 30, 2018 at 2:45 pm

    Carriers made a huge mistake in underestimating the fuel costs impact on 2017/2018 contracts, thus the 1st quarter results. But when budgeting for the 2018/2019 contracts, they knew the impact and chose to continue to chase filling ships instead of managing capacity, compounding the error. Their bad.
    On the other hand, shippers who claim to want cost transparency – does that mean you can accept cost based pricing? You won’t like that outcome.

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