[210120.EN.SEA] Shipping Industry Needs To Responsibly Protect Environment

IMO 2020 is a necessary but unwelcome burden for container shipping stakeholders, according to shipper representatives.

Global Shippers Forum (GSF) secretary-general James Hookham said importers and exporters face a wide range of challenges in the early part of this year, as shipping lines seek to recover the cost of compliance with new IMO 2020 low sulphur rules by passing on extra surcharges.

"With the container shipping industry in a trough of depression, the additional burden of complying with tough new rules on emissions from vessels is a necessary but unwelcome start to 2020," he said.

"The shipping industry has widely assumed that the costs of cleaning up its environmental act can simply be passed onto its customers (shippers) in the form of surcharges.

"Whether that will be the case will be the subject of individual negotiations over the coming months," Mr Hookham was quoted as saying in a report by FreightWaves, New York.

However, shippers should be demanding clear and consistent explanations of any surcharges demanded. "GSF's 'Top Ten Tips for Sulphur-Surcharged Shippers' reminds our members of the ground rules and to scrutinise carefully any surcharge demands made during contract negotiations," he said.

The GSF tips highlight the fundamentals of the new rules that all vessels are now required to meet in all parts of the world. But it also encourages shippers to challenge the basis of any surcharges to make sure they understand exactly what they are being asked to pay extra for - and whether it can be properly explained and justified by carriers.

"Ultimately, the industry needs to move on to a more mature pricing regime with confidential contracting and all-inclusive charges becoming the 'new normal'," said Mr Hookham.

"The shipping industry needs to wean itself off surcharges, just as much as it does high sulphur fuels."

According to Mr Hookham, in 2020 the environmental performance of the shipping industry will come under intense scrutiny in the world's regulatory forums.

"The IMO low sulphur fuel regulation will be followed by crucial meetings on reducing greenhouse gas emissions and shipping's carbon footprint," he added. "The industry needs to demonstrate a responsible attitude to meeting the costs of its environmental responsibilities to retain the confidence of customers and regulators."

Source : HKSG.