New EU rules spark warnings over logistics costs

A Midlands shipping commentator has warned businesses trading overseas to ensure they were keeping a close eye on their logistics budgets with new rules over fuel pollution coming into force this month.

Shipping companies in north Europe will face heavy fines if they fail to cut pollution from fuels, following the introduction of new EU regulations in 2015.

And Nicole Howarth, managing director of Global Freight, said some of the industry's key players were warning that increased costs to switch fuel may be passed on to customers.

Nicole Howarth, managing director of Global Freight.

She said: "These new rules could see huge fines for companies which fail to comply with a switch to a greener fuel, although in many cases these may prove cheaper than actually switching to the more expensive fuel which produces less pollutants."

Ships are typically powered by heavy fuel oil, which contains around 2.5 to 3 per cent sulphur but next year, all ships operating in the North Sea, Baltic Sea and English Channel will have to use a fuel with a maximum sulphur content of 0.1 percent.

"Clearly, ferry operators will be hardest hit however companies operating within the Eurozone and using sea freight, should keep an eye that costs are not escalating.

"Although the majority of our customers are shipping outside of north Europe, we work hard to ensure we offer the best solution for transporting goods. As part of this bespoke process, we look closely at a number of factors, including fuel costs and whether there are opportunities to change the mode of transport or configure shipments in different ways, so that fluctuations due to external costs are limited for customers."

Maersk Line, the world's biggest ship container group, said switching to low-sulphur fuel under the EU rules will cost it an extra $200 million a year. P&O Ferries' fuel bill will rise by 30 million pounds ($50 million) a year and the company has already indicated that it will be customers feeling the pinch.

Mrs Howarth is an international trade expert whose company works with businesses of all sizes, from first-time exporters to established businesses with complex two-way trade programme.

The independent freight forwarder has established an international reputation for excellent customer service coupled with quality advice and guidance for companies trading abroad.