Surcharge on ferry crossings could add £21m a year to transport costs, warns FTA
BUSINESSES in the north shipping goods across the Irish look set to face a hike in costs from new worldwide surcharges on shipping lines.
The costs are linked to new measures in adapting to sulphur oxide targets, which come into force across the globe from January.
All freight shipped between Northern Ireland and Britain will be subject to the new charge.
The Freight Transport Association (FTA) said that it could add £21 million a year to transport costs.
Mandated by the UN's regulatory body for shipping, the IMO, the rules place a cap on the sulphur content in marine fuel.
The surcharge is calculated on the basis of the distance travelled by ferry and whether a HGV trailer is accompanied.
There were around 850,000 freight movements between Northern Ireland and Britain in 2018.
The FTA's policy manager in the north, Seamus Leheny said the costs cannot be absorbed by logistics providers and will have to be passed along the supply chain to manufacturers, retailers and distributors.
“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,” he said.
“ This is the new normal, so shipping companies should be including this in normal commercial pricing arrangements.
“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.
“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.”