Maersk is installing equipment on its ships to help lower its sulphur emissions

Maersk is installing equipment on its ships to help lower its sulphur emissions

Global logistics giant AP Moller Maersk insists the new surcharge it is establishing in a bid to lower sulphur pollution at sea has been "well received" by customers as it hits back at allegations from the British International Freight Association that the hike is "unjustified" and "exploits the situation".

Last week Maersk announced customers would see prices for shipping increase in 2020 as the freight operator moves to lower the environmental impact of its operation.

Maersk ships will be fitted with LNG or scrubber technology which is expected to lower global shipping's sulphur emissions by 80%. At present, ships are able to use fuel with up to 3.5% sulphur content. However, from 1 January 2020, this will be capped at 0.5% in line with regulation from the International Maritime Organisation.

Installation of the equipment, however, is costly and the cost would be translated to customers through price increases.

Maersk has introduced a Bunker Adjustment Factor (BAF) to help customers predict, plan and track how changes in fuel price will impact total shipping freight rate - an update on the existing SBF surcharge that is based on "several variable factors". The BAF will replace the existing Standard Bunker Factor (SBF) and allows customers to simulate and calculate the BAF tariff at any fuel price for a given trade route. It will come into effect from 1 January 2019.

BIFA argues the move could result in prices for a 40ft container on the Far East to North Europe route being upped from US$480 to $840, dependent on fuel price.

"By any measure, these are very major increases, and they will be received negatively by BIFA members' customers," Robert Keen, BIFA director general, says.

"While the shipping operators may say that the new BAFs are needed to cover the cost of switching to low sulphur fuels or fitting exhaust 'scrubbers', rises of this magnitude are unjustified and could be construed as blatant profiteering by shipping lines determined to exploit the situation."

Maersk's decision follows an earlier move this year by shipping companies to impose "emergency" bunker surcharges in response to rising fuel costs. 

"Forwarders do not like shipping line surcharges - we have been challenging, and will continue to challenge their legitimacy on behalf of our members – and their customers," says Keen.

"BIFA would prefer any increases that are necessary to be consolidated within freight rates and with any required fluctuation being managed against that figure," he adds.

Speaking to just-style today, a spokesperson for Maersk explains, imbalance factors have "always been a part of our BAF".

He adds: "This is nothing new and is also part of the current surcharge.

"We have had a positive dialogue with our customers about the new BAF surcharge. The predictability provided by the BAF has been well received by the customers.

"Maersk Line's new BAF is designed to be fully predictable for our customers. The actual tariff level reflects actual fuel cost, and it is fully predictable what will happen to the BAF tariff when the fuel price increases."