01-06-2018

Hapag-Lloyd introduces US$1/TEU EBS, sets $55/TEU peak season surcharge

GERMAN shipping giant Hapag-Lloyd is to impose a US$1 per TEU emergency bunker surcharge (EBS) on the Asia-North Europe and Asia-Mediterranean trades from July 1, the latest carrier to announce measures to address the rising oil price.

The carrier's surcharge is well below the $55 to $60 per TEU fuel surcharge being levied by Maersk Line, Mediterranean Shipping Co (MSC) and CMA CGM.

In a customer advisory, the Hamburg-based shipping line said the incremental $1 per TEU surcharge will be applied to inbound and outbound containers to and from Asia and Oceania.

However, Hapag-Lloyd surprised the market with a peak season surcharge of $55 per TEU that the ocean carrier said will be levied from today (June 1) on all trades out of China. The Asia-Europe peak season doesn't normally begin until July.

The Hapag-Lloyd bunker surcharge was well under the levels that will be charged by the other carriers, something questioned by Lars Jensen, CEO and partner of Sea Intelligence Consulting.

"Interestingly, Hapag-Lloyd introduced an EBS of $1 per TEU on some major trades. For Maersk Line, the corresponding charge is $60 per TEU and for CMA CGM it is $55 per TEU. MSC has not published an official number. Quite a diverse take on the impact of the increasing oil prices," he said.

The carrier surcharges have been met with strong disapproval by beneficial cargo owners (BCOs). One of the more outspoken shippers has been Bjorn Vang Jensen, vice president of global logistics at Electrolux.

"I'd love to see carriers' reaction if we wrote them all a mass mail along the lines of, 'due to the recent increases in steel prices, we hereby arbitrarily decrease the freight rates by 20 per cent, effective immediately and notwithstanding any other agreements'," he wrote in a LinkedIn post. "Something tells me our cargo would be spending a lot of time on the wharf at the port of origin."

Mr Jensen said the reality was that carriers needed to have their costs covered and running loss-making services was not in the long-term interests of shippers, as seen in the Hanjin bankruptcy, reports IHS Media.

"But it seems evident that years of rate erosion and quite fierce price competition have led to a point where carriers appear not to believe in their own market power in terms of raising the actual freight rates, but need to point to a plethora of surcharges to get properly compensated," he said.

"The EBS is merely an additional symptom of this, and that is likely why the logic behind the EBS seems to be somewhat lacking, because de facto the problem being addressed is not an exceptional increase in fuel price, it is the collapse of the BAF mechanism itself over the past years."

Source: Schednet

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