Transition to one Fossil Fuel Fee (FFF) for Contracts over 3 months’ validity

Maersk is streamlining costs of the different fuel types (mandated by regulations) into a single surcharge. The surcharge is called the Fossil Fuel Fee. It is calculated off a weighted sum of the different types of fuel used in a trade. The FFF methodology is designed to ensure a fair/accurate reflection of network efficiency and fuel requirements mandated by regulations.

Currently, there are two types of surcharges connected to fuel for cargo on Ocean: the Bunker Adjustment Factor (BAF) and Low Sulphur Surcharge (LSS). These surcharges relate to the type of fuel that is in use and are in line with regulations related to the individual type of fuel. The FFF surcharge calculation methodology will be phased in to replace the BAF and LSS.

Today, we recover cost of 0.5% sulphur fuel through BAF and 0.1% fuel through LSS. If regulators mandate use of new fuel type, we will have to pass the cost to customer in the form of a new surcharge/s adding to the complexity. FFF will simplify billing by streamlining costs of different fuel types mandated by regulations into a single surcharge. It will simplify the billing for customers.

Starting from 1 July 2024, all new quotes for contracts over 3-month validity will be quoted with FFF.
This means:

• If we quoted a customer on 30 June 2024 for a contract effective on 1 October 2024, then it would be quoted on BAF and LSS.
• If we quoted customer on 1 July 2024 for contract effective on 1 October 2024, then it would be quoted on FFF.

For existing contracts with BAF and LSS, our goal is to minimise any disruptions.

Contracts with a validity of up to one year will continue under BAF AND LSS until renewal. At the time of renewal, these contracts will transition to FFF. For example, if an existing contract is set to expire on 30 June 2025, we will switch it to FFF for the renewed contract starting 1 July 2025.

If we already quoted with BAF and LSS, then we will not transition to FFF. Instead, we will conclude quoting with BAF and LSS. Unless we are quoting for multi-year deal where a decision would be taken in alignment with the customer to transition now or at the time of next rate review/update agreed as per contract.

FFF tariff rates will be emailed to customers contracted on FFF. Please reach out to your Maersk Sales representative if you do not receive it.

BAF and LSS will remain active until 100% of contracts transition to FFF.

Yes, we will continue to publish quarterly BAF and LSS rates, like we do today, until 100% contracts transition to FFF.

This depends on the ECO Delivery product customers opt for.

Customers can visit Maersk ECO Delivery | Maersk or contact their Maersk Sales representative to find out more.