Shipping lines say they are absorbing the cost of investments in alternative fuels and lower-emission vessels, while shippers and their freight forwarders remain reluctant to pay extra for greener transport. The remarks came at the Singapore International Bunkering Conference and Exhibition.
What Happened
Speaking at the event in Singapore, carrier representatives said the cost of alternative fuel procurement and fleet renewal to meet emission-reduction requirements is currently being carried by the lines themselves.
Chia Yujin, head of operations and procurement (China) at Pacific International Lines (PIL), said shippers in price-sensitive markets are not yet ready to pay for the industry's transition.
Shippers and forwarders generally remain unwilling to bear higher freight rates for greener shipping, leaving a clear gap between the two sides over who should pay the green premium.
Background
The international shipping industry faces progressively tighter emissions rules, requiring carriers to replace conventional capacity with alternative fuels and new lower-emission vessels, at capital and fuel costs above conventional levels.
With freight rates highly competitive and cargo growth limited, carriers have found it difficult to pass these incremental costs on through rates, leaving green investment largely as a cost burden on the lines.
Impact on Shippers
On cost, green premiums have not yet entered public rates on a large scale, but if pressure on carriers persists, costs may later be shared through surcharges or dedicated green-lane products. Shippers should watch for new line items in quotations.
On transit time and customs clearance, the report did not mention specific route changes or regulatory effective dates, so there is no direct impact for now. However, the pace of deploying alternative-fuel vessels could affect capacity allocation on some lanes, and shippers may want to monitor schedule reliability when booking.
Recommendations
Shippers should ask explicitly whether quotations include green fuel-related surcharges and confirm cost-adjustment mechanisms with long-term partners in advance. They should also assess whether to use green-lane products based on their own customers' demand for low-carbon transport, and factor the related costs into pricing calculations.