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Bunker surcharges are return to dark ages, says shipper group

[ May 29, 2018   //   ]

The Global Shippers Forum has described the emergency surcharges recently introduced by liner shipping conferences as “an unwelcome legacy of the cartel era”.

GSF said that in recent weeks, the world’s leading liner shipping companies have announced bunker surcharges in response to rising fuel costs “almost in unison”. In most cases, they were imposed on top of existing bunker surcharges, it added.

Soon-to-retire GSF secretary general Chris Welsh said that, a decade since the abolition of the liner conference system in October 2008, the container industry is still using conference-style pricing methods to impose surcharges on its customers.

He said: “Container ship operators need to ‘fess-up’ by taking responsibility and greater control of their costs, rather than announcing vaguely explained short-notice unrecoverable surcharge costs on customers.

“It is incumbent on container carriers to provide their customers with full transparency regarding bunker surcharge costs, and to explain why an emergency surcharge is warranted on top of existing bunker surcharge mechanisms. Shippers will also want to know what steps have been taken to mitigate the impacts of rising fuel prices, including the impacts of fuel hedging arrangements which are designed to manage the risks.

“The imposition of emergency surcharges has no place in a modern liner shipping market where costs and prices should be mutually agreed between customers and suppliers, preferably in mutually agreed service contracts,” he added.

He described emergency surcharges as: “a none too subtle attempt to impose non-negotiable charges on customers. The liner industry needs to employ more appropriate pricing arrangements, in conjunction with its customers, if it is serious about developing partnership approaches and improving individual customer-supplier relationships.”

 

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