Fuel targets could cost shipping sector £21m a year

FIRMS shipping goods across the Irish Sea could face more than £20m in extra charges each year as they attempt to meet new targets on sulphur oxide, it has been claimed.

Industry body the Freight Transport Association (FTA) fears the changes could make doing business with Great Britain and Europe more expensive for local companies. According to the FTA, shipping lines will face extra costs of around £21m per year from having to comply with new sulphur oxide targets from January.

The rules from regulatory body the IMO require the sulphur content of marine fuel to be no more than 0.5%.

The industry fears that surcharges will be levied on companies shipping goods across the Irish Sea.

Seamus Leheny, policy manager for the FTA in Northern Ireland,

said: “Surcharges are a bad response to this change.

“While the industry has been expecting increased costs as a result of the new rules around low-sulphur fuel, a new surcharge mechanism seems unnecessary.

“This is the new normal, so shipping companies should be including this in normal commercial pricing arrangements.”

The FTA said that it was opposed to the use of surcharges in shipping, claiming that managing input cost charges was a normal part of business.

Mr Leheny added: “These changes have been known about for a long time and could have been factored into all business plans for 2020. They are not temporary, nor are they different to what is being done anywhere else in the world.

“The FTA wants the shipping companies to move away from this approach as quickly as possible as we see no need for this additional charging mechanism.”

The FTA stressed the welfare of the logistics industry was crucially important. “Efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods,” it added.

“With Brexit, new technology and other disruptive forces are driving change in the way goods move across borders and through the supply chain.

“Logistics has never been more important to UK plc.”