Shippers say lines will simply pass on costs of ‘green’ taxes rather than reduce emissions

News Release The Shippers Voice August 5, 2011

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Shipper groups say the introduction of green fuel taxes will not
reduce emissions. They claim that
shipping lines will not switch to more environmentally-friendly
fuels or more efficient ships, they will
simply add yet another surcharge to the rates they charge their
customers.
Nicolette van der Jagt, Secretary General of the ESC told The
Shippers’ Voice: “A uniform levy or tax
on all ships and all fuel purchases would be a risk to shippers
whichever way you look at it: the added
costs will be merely passed on to the customers through surcharges
without offering a clear incentive
to the carrier to increase the efficiency of the ships or their
operation.”
Most of the talk from the shipping sector and governmental
organisations is about establishing a levy
or tax on fuel that is proportionate to the level of emissions
from each and every ship. The way to
reduce such charges would be to score well on the recently
approved Energy Efficiency Design Index
for ships, as agreed by the International Maritime
Organization.
Shippers, including the Global Shippers Forum, the
British Shippers’
Counciland the
European
Shippers’ Council(ESC) say this strategy will not work.
Based on their track record, says the groups, the shipping
industry, and particularly the liner shipping
industry, is likely to pass on these charges to their
customers.
And you cannot blame shippers for thinking this, says a Shippers’ Voice
spokesperson. “Every time
the liner shipping industry finds another individual cost, it
tries to pass it on in a surcharge or ancillary
cost, whether it is for fuel price increases, currency
fluctuations, being too busy (e.g. peak season
surcharges), port strikes, congestion or even fog. Whatever the
cost, the shipper is targeted to pay.”
That may seem reasonable to some: you pay for the service you get,
and what it costs to give that
service. The trouble is, some shippers would argue that they do
not always get the service they pay
for anyway. Whether it is a delayed vessel, rolled over cargo
(i.e. not loaded), or delivered to a
different port at a different time than planned because of service
changes, the shipper does not
always get a good service.
Any business with poor service performance would be looking to
rectify the problem so that the
service being provided actually improved. But why bother when you
can pass the costs on in the form
of surcharges or, in an over-supplied market, the rate you get is
not worth the effort, and the
competition isn’t necessarily much better either?
So, shippers around the world believe a levy or tax will merely be
passed on to them, and the ships
will have very little incentive to change practice or improve
design in order to reduce emission-related
charges.
“What is needed is a mechanism which rewards shipping companies which
invest in new designs,
technology and practices which reduce emissions without reducing
service performance; a scheme
which does not add to current costs, but clearly provides an
incentive to ship operators and owners,”
says Shippers’ Voice.
This is a view echoed by Ms van der Jagt: “The preferred approach
should be one which provides
tangible incentives and rewards to owners and operators of
individual vessels who invest in ships and
ship technologies that optimise vessel utilisation, operation and
fleet sizes, and reduce emissions of
GHGs. I believe that shippers will increasingly be drawn to those
ships which attract lower costs for
the supply chain from lower emissions, provided the service does
not diminish.”
For full article: www.shippersvoice.com</DIV></BODY></HTML>