Shipping Lines Begin to Announce Low Sulphur Surcharge (LSS)

When put in comparison with air freight, road and rail haulage, sea freight is actually quite environmentally friendly. Emitting only 15g of CO2 per tonne moved a km, sea freight is over 35 times more eco-friendly than air freight and 3 times more efficient than truck haulage.

However with the oceans so full of container ships, the enormous scale of operations accounts for 3% of the globes total CO2 emissions. This has led to new environmental regulations, forcing shipping lines to use better quality, cleaner fuels in certain areas. The regulations put a limit on the amount of sulphur being burned on voyages.

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The shipping lines claim that the cost to them of buying higher quality fuel will increase their costs by as much as 50% in some cases, a fee which they must somehow transfer forth to their customers to ensure they do not take a loss. This will come in the form of Low Sulphur Surcharges. The current announced figures are around $15 per 20ft container on routes from Asia to Europe.

There is some speculation that these LSS fees could grow overtime and could be anywhere from $15 upwards and could soar beyond $165 per TEU (Twenty foot container) in some instances. ‘UniFeeder’ for example have claimed they will impose surcharges of $81 USD per container as standard to regain the cost of the switch to low sulphur fuel. Maersk line have warned of charges from $25-75 per TEU.

Most of the lines believe their customers will understand, and gracefully take on board the costs identifying the benefit to the environment the change will have, what do you think?


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