Container shipping lines use the BAF surcharge to ease the impact of the coronavirus, even though the surcharge is meant to cover fluctuations in the oil price, and this could challenge the entire purpose of the surcharge, writes SeaIntelligence.
The container shipping lines have not been able to push the costs of the new sulfur regulations on to customers in January. At least not when looking at backhaul voyages, notes analyst firm Sea-Intelligence.
Yet another of the world's biggest container shipping companies now introduces an extraordinary bunker surcharge following recent weeks' large price increases on low-sulfur fuels. This time it is German Hapag-Lloyd, ShippingWatch learns.
Growth in volumes in the container market so far in 2019 is the lowest in years, and this could impact whether the container lines can send the billions of dollars in added costs for more expensive fuel on to their customers, says Bimco.
Væksten i volumerne i containermarkedet er indtil videre i 2019 den laveste i flere år, og det kan få betydning for, om rederierne kan sende milliardstor ekstraregning for dyrere brændstoffer videre til kunderne, vurderer Bimco.
Extra expenses for low-sulfur fuel are small enough compared to factors such as US tariffs on Chinese goods that they will not lead to a similar container boom ahead of the new sulfur regulations, notes analyst firm Sea-Intelligence.
Merudgiften til lavsvovlsholdigt brændstof er så lille sammenlignet med eksempelvis amerikansk told på kinesiske varer, at det ikke vil føre til et tilsvarende containerboom op til svovlkravene. Det vurderer analysehuset Sea-Intelligence.
If shippers play their cards right, they can benefit from significant differences in how sensitive the major liner companies' bunker adjustment factors are to oil price fluctuations, notes Seaintelligence.
Several of the world's largest shipping lines, such as Hapag-Lloyd and Maersk, say that customers seem to accept the extra cost of low-sulfur fuel oil. ShippingWatch has spoken to one of the world's largest shippers, which far from agrees.
A majority of shippers have accepted the new bunker surcharges in contract negotiations, say the CEOs of Maersk and Hapag-Lloyd, Søren Skou and Rolf Habben Jansen, in interviews with ShippingWatch. Maersk also heralds increased rates.
There are significant differences between the various much-discussed bunker surcharges, which liner shipping companies are working to introduce ahead of the 2020 sulfur cap, even though they appear similar at first glance. Here is a look at the most important new bunker adjustment factors.
With half a million containers on the oceans every year, Nestlé is considered a VIP customer in the liner industry. However, the well-known food producer is far from pleased with the service and transparency of the new bunker surcharge set-up announced by major carriers.
There is not enough transparency in the upcoming agreements for container freight, according to criticism voiced by Bjørn Vang Jensen, VP of Global Logistics at Electrolux. Maersk Line CEO Søren Skou says that the current clause is far more transparent than the previous ones.
A new bunker adjustment factor at Hapag-Lloyd will help ensure two things, explains Juan Carlos Duk, managing director of global commercial development, to ShippingWatch. The BAF will very much address longstanding criticism from customers.
Three liner companies agree that the carriers' extra costs triggered by the new fuel regulations should be pushed onto customers – an approach that mirrors Maersk Line's decision this week to announce new bunker adjustment factor.
The European Shippers' Council has now formally submitted a letter to the EU Commissioner for Competition, Margrethe Vestager, with a complaint about the liner companies' new emergency bunker surcharge. Read the letter here.
The European Shippers' Council has received numerous complaints about the liner companies' new and controversial emergency bunker surcharge. The case will now be brought before EU Competition Commissioner Margrethe Vestager.