Low Sulphur Fuel Surcharge; abbreviated as LSS Charges, is one of the many shipping surcharges that are charged to cover the increased cost of using low sulphur fuel for ships sailing in the new sulphur oxide emission control areas.
Origin of LSSTo LSS Chargessupport energy conservation and emission reduction, the shipping industry introduced ship emission standards.
For more surcharges on transportation, check out this article:
Origin of LSS Charges
From January 1, 2015, fuel oil with a sulfur content of no more than 0.10% m/m should be used. In addition, ships may be exempted from the requirement to use low-sulfur fuel oil if they use an exhaust gas cleaning system that is as effective as low-sulfur fuel oil.
This emission limitation from January 1, 2015 also applies to the other three IMO delineated Emission Control Areas (ECAs)
Does sea freight include LSS Charges?
- Low Sulfur Surcharge is one of the many shipping surcharges. The LSS fee charged by each shipping company is different, and the basic port and transshipment port charges are also different.
- The calculation of ocean freight is: basic freight + ocean freight surcharge. Ocean freight is usually calculated according to the weight of the goods; according to the size or volume of the goods; according to the weight or size of the goods, and choose the one which charges the higher freight rate.
- The general ocean freight ALL IN price includes O/F, DDC, BAF (ABAF), and it is impossible to have CAF. The port of departure side and SPS (Shanghai Port Terminal Operating Fee), ORC (South China Receiving Fee), the port of destination side of the ISPS, CTF (Air Cleaning Fee), PIER PASS Fee and so on. In addition, AMS fee USD25/ticket will be charged.
- According to you want to go out freight payable or freight prepaid bill of lading to determine. The sea transportation process includes the cost of terminal costs, shipping company costs, freight forwarding costs, inspection / customs brokerage costs and fleet transportation costs.
- In the modern mode of transportation, shipping by virtue of the development of large ship technology and the advantages of low transportation costs, large loading capacity, etc., is the most important mode of international trade logistics, accounting for about 90% of the share.
Who bears the LSS Charges in FOB
Paid by the exporter.Starting from November 1, 2018, a number of shipping companies began to levy low-sulfur oil surcharges for business involving China, and generally about 20 U.S. dollars or 100 yuan per TEU will be levied.
If the cargo is FOB designated cargo, FOB terms do not include freight, LSS as a component of freight should be borne by the consignee.
If it is C&F or CIF terms, LSS Charges should be borne by the consignor. But for the shipping company, they basically default to the port of shipment shipper prepaid this fee.
If you do is FOB designated goods, freight forwarders also charge the shipper LSS Charges , which is unreasonable. Because FOB terms do not include freight, as part of the freight LSS should be borne by the consignee.
If C&F or CIF terms, LSS Charges should be borne by the consignor.
In FOB terms, these costs must be borne by the seller. Because FOB terms are FOB, all costs and risks before the goods leave the port of origin are borne by the seller (seller/shipper).
FOB related post:
Standard of LSS Charges
For shipping companies, under the low-sulfur era, they have to use low-sulfur fuel more often, and the cost of low-sulfur fuel is much higher than that of conventional fuel in the past. In order to make up for this increase in cost, a low-sulfur surcharge is added to share the increase in cost with the cargo owners.
The LSS fee charged by each shipping company is different, and the basic port and transshipment port charges are also different. For basic port, it is usually 15-25usd/TEU, such as the basic port in Europe, some shipping companies charge as follows (the fee may be adjusted, for reference only):
- APL: USD20/TEU
- NYK: USD25/TEU
- OOCL: USD24/TEU
- MSC: USD15/TEU
- MSK: USD15/TEU
- COSCO：USD20/TEU
- CMA：USD25/TEU
- HANJIN：USD25/TEU
- KLINE：USD25/TEU
