WHILE local shippers appear to be still digesting news of Maersk Line’s new fuel surcharge mechanism, customers overseas have given it a mixed reception.

Maersk announced late last week it will introduce a Fossil Fuel Fee (FFF) “as a part of simplifying your logistical moves by streamlining the costs of the different fuel types (mandated by regulations) into a single surcharge.”

“Currently, there are two types of surcharges connected to fuel for cargo on Ocean: the Bunker Adjustment Factor (BAF) and Low Sulphur Surcharge (LSS). These surcharges relate to the type of fuel that is in use and are in line with regulations related to the individual type of fuel,” Maersk said. “The FFF surcharge calculation methodology will be phased in to replace, the BAF and LSS.”

Maersk says the FFF will be reviewed and updated quarterly, using scalable methodology, and will simplify the invoicing structure. Accordingly, the existing BAF to recover 0.5% sulphur fuel cost and the LSS to recover 0.1% low sulphur fuel cost, charged with quarterly review and updates, will be replaced by the FFF.

“Our goal is to bring ease and connectivity to your logistics. We believe that the simplification to one surcharge related to fuel on ocean will offer multiple benefits,” Maersk said. 

The FFF Tariff will be available from Q3 2024, i.e. effective from 1 July 2024. Starting from this date, all new contractual quotes over three months’ validity will be quoted with FFF. Pre-existing contracts with BAF and LSS will continue as is until the time of renewal. After this, they will transition to FFF. “Therefore, we will continue to publish BAF and LSS tariff rates. This is to avoid any unexpected impact to these pre-existing contracts,” Maersk said.

The phrase that has drawn overseas concern is the advice that “if regulations are introduced mandating the use of new fuel types, we would have to pass the costs to customers in the form of a new surcharge/s, adding to complexity”.

This has led to speculation Maersk is positioning to seek customer cover for its exploration of alternate fuels including methanol and ammonia, which will be/are considerably more expensive and require even more expensive infrastructure, not least ships. Observers have also noted “the devil will be in the detail”.

Local shippers contacted by DCN said it was “too early” to make judgement but “we’re always suspicious when any new surcharge appears, regardless of what it’s claimed to be.”