Ocean Freight Surcharges
LSS Surcharge (Low Sulphur Surcharge)
LSS (Low Sulphur Surcharge): Surcharge for IMO 2020 compliant low-sulphur fuel. When it applies, typical range, and who pays under common Incoterms.
- Code
- LSS
- Name
- Low Sulphur Surcharge
- Typical range
- $30-$200 per TEU
- Routes
- All ocean routes globally
The Low Sulphur Surcharge (LSS), also known as IMO 2020 Surcharge, was introduced to cover the additional costs of using low-sulphur fuel oil (LSFO) as mandated by the International Maritime Organization's regulations that came into effect on January 1, 2020.
The IMO 2020 regulation requires ships to use fuel with a maximum sulphur content of 0.5% (down from 3.5%), or install scrubbers to clean exhaust emissions. Low-sulphur fuel typically costs more than traditional high-sulphur fuel oil (HSFO).
The surcharge covers: • Price premium for VLSFO (Very Low Sulphur Fuel Oil) over HSFO • Investment costs for vessels using scrubber technology • Operational costs of compliance monitoring
LSS varies significantly based on the price spread between VLSFO and HSFO. When the spread narrows, LSS decreases; when it widens, LSS increases.
When LSS applies
Applied to all shipments since IMO 2020 implementation. Permanent surcharge.
Who pays LSS under common Incoterms
- FOB: buyer
- CIF: seller
- EXW: buyer
- DAP: seller
How to minimize LSS
- Choose carriers with scrubber-fitted vessels (lower LSS)
- Negotiate LSS caps in contracts
- Consider all-in rate negotiations
- Monitor VLSFO/HSFO price spreads
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Frequently asked questions
What is the LSS surcharge?
LSS stands for Low Sulphur Surcharge. Surcharge for IMO 2020 compliant low-sulphur fuel.
When does LSS apply?
Applied to all shipments since IMO 2020 implementation. Permanent surcharge.
How much is LSS?
The typical range is $30-$200 per TEU. Confirm the current amount with your carrier or forwarder.