ZIM responds to ECA with additional low sulphur fuel charge from September 15

ISRAELI cargo shipping company ZIM Integrated Shipping Ltd has announced plans to implement a 'Low Sulphur Fuel Charge' of US$20 per TEU, starting from September 15, 2012.

The surcharge will be applied to the trade between North Europe/Mediterranean and North America (all coasts) in both directions.

The shipping line said in a statement, "The charge is applied in order to cover the increased fuel costs, incurred due to the decision by the International Maritime Organization (IMO) to apply stricter controls on emissions for ships sailing off the coasts of Canada and the United States."

The North America Emissions Control Area (ECA) came into effect on August 1, 2012, and effects all ships operating within 200 nautical miles off the coasts of Canada and the US. It calls for all vessels to use marine fuel with a sulphur content not exceeding 1.00 per cent by weight, which is essentially a more expensive type of fuel.

The ECA has also prompted German shipping company Hapag-Lloyd to make a similar announcement earlier this month, saying it had been "forced" to introduce a low sulphur fuel charge.

Zim's move comes as it struggles to turn a profit on the back of continuing low freight rates and high oil prices, which it blamed for causing a first quarter 2012 net loss to shareholders of US$163 million, combined with the impact of an increase in accounting (non-cash) financial expenses. In the fourth quarter last year the company posted a loss of $151 million.