The European Shippers’ Council (ESC) raised concerns about the implementation of Emergency Bunker Surcharge by carriers. Carriers explain the introduction of this surcharge by the increase of the bunker oil price. However, ESC said that the use of such measure is not justified.
As ESC said in a letter to the European Commission, oil prices had indeed been rising during the last month, however this amount of increase does not justify the implementation of such a measure.
Oil price fluctuations, up or down, had been frequently happening in the past years and no negative surcharge was applied when the barrel of oil went down to 40 US$ some time ago.
According to ESC, with the current situation, carriers can use a specific clause which exists in many contracts, to revise the freight rates accordingly. Including such a clause in the contract is part of the negotiating process between the parties. If such a clause is not provided in the contract, the price should remain the same until the contract is completed.
An Emergency Bunker Surcharge could be justifiable if it is applied in cases events that cannot be foreseen, such as a crisis affecting the availability of oil.
ESC concludes by saying that:
The fact that the container liners, who announced that they would apply such a surcharge, have been doing it almost simultaneously is, from ESC point of view, tantamount to price signaling, and therefore, is in contradiction with the spirit of the “GRI commitment” which liners agreed upon with the European Commission 2 years ago.
Until now, three shipping giants, Maersk, MSC, and CMA CGM, have announced introduction of Emergency Bunker Surcharges, due to the increasing fuel costs.
ONE also encountered significant inflation of fuel costs over recent months. This increase in fuel costs made the company to implement a Bunker cost Recovery Surcharge (BRS) charge on a widespread basis.
Namely, fuel prices have increased by more that 30% this year, and almost 70% since last June.
The Global Shippers Forum (GSF) also said that this is a negative development and needs to be changed. As Chris Welsh, Secretary General of the Global Shippers’ Forum noted:
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.