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Wednesday, March 21, 2018

Maritime Logistics Professional

November 21, 2014

Maersk to Introduce Low Sulphur Surcharge

Low Sulphur Surcharge

Low Sulphur Surcharge


To offset the additional cost incurred by switching to cleaner fuels in Emission Control Areas, as required by the new regulation, Maersk Line will introduce a new Low Sulphur Surcharge (LSS). The surcharge will be effective from 1 January 2015 and affect all cargo with load port, transshipment and/or discharge port in Emission Control Areas. This is Maersk line’s ongoing commitment to sustainability by supporting the establishment of ECAs as a way to reduce air pollution from shipping.

The Low Sulphur Surcharge (LSS) will be charged as a separate item on the costumers’ invoices. Tariff will be reviewed quarterly. To offset the additional cost incurred, Maersk Line will incorporate the higher average fuel costs into the existing standard bunker surcharge (SBF). The company expects that additional cost to customers in affected trades will be between USD 50 and 150 per 40’ container to and from main ports, depending on transit time inside ECA areas and whether touching ECA areas at both origin and destination. Reefer containers will incur higher cost due to fuel used to generate power on board vessels. Cost will also fluctuate depending on the volatility of low sulphur fuel prices.

“Fuel with a sulphur content of 0.1% is significantly more expensive than fuel with 1.0% sulphur content required in ECA areas today. Based on the current price difference of USD 260/ton, the additional cost to Maersk Liner Business is estimated to USD 200 Million per year. We will have to pass on the additional cost to our customers in order to fully support the ECA regulation. We hope the new regulation is strictly enforced to safeguard the environmental benefits and ensure a level playing field for ship operators,” said Mr. Franck Dedenis, Managing Director for Maersk (India and Sri Lanka).

MaerskSri LankaFranck Dedenis