As per a previous announcement in late September, Geneva-based major MSC Mediterranean Shipping Company is introducing new bunker charges as of 1 January 2019 in line with 2020 sulphur cap. After considerable analysis of operating costs and related market factors, the company has now established a new price mechanism – the BRC (Bunker Recovery Charge) – which will be transparent to respective trades.
With regard to IMO's 2020 sulphur cap, MSC has estimated that the cost of the various changes it is making to fleet and its fuel supply is in excess of two billion dollars (USD) per year. The Bunker Recovery Charge will reflect the true additional cost that MSC will incur as a result of the regulatory changes to protect the environment.
The BRC replaces the current Bunker Contribution (BUC), Fuel Adjustment Factor (FAD) and Emergency Fuel Surcharge (EFS), and largely absorbs other pre-existing fuel-related charges. Charges specifically related to coastal Emission Control Areas (ECAs) will remain in place.
"We believe that it is essential to segregate transparently the burden of fuel costs, in order for this cost to be passed on visibly throughout the supply chain. Passing on that cost is also vital to ensure the sustainable future of the container shipping industry."