Introduction to the Concept of EFS in Maritime Transportation
Today, many of humanity’s essential needs are met through maritime transportation. Goods are delivered to consumers by vessels that operate continuously along international waterways. To manage and regulate the large volume of ships navigating these routes, specific rules and principles have been established.
Gaining a full understanding of all these regulations requires considerable time and expertise. One concept in the shipping industry is EFS, which is explained in detail in this article.
Legal Challenges and Considerations Related to EFS
The Concept of EFS in Shipping
Changing the type of fuel used by vessels incurs an additional cost, known as the Environmental Fuel Surcharge (EFS). This regulation was introduced by the International Maritime Organization (IMO) at the beginning of 2020 to transition vessel fuel to types that cause less environmental harm. Implementation of this regulation became mandatory for all shipping lines as of March 2020. As a result, shipping companies charge an additional fee for fuel conversion on all containers.
EFS Costs in Maritime Transportation
The implementation of the EFS regulation has reduced sulfur emissions from ship fuel combustion, thereby improving air quality and protecting the environment. The surcharge amount varies by container size, with larger containers subject to higher EFS charges.
Where buyers and sellers rely on Incoterms in their contracts, responsibility for payment of the EFS depends on the applicable term. If the contract is concluded under the CFR rule, the seller is responsible for paying the EFS. However, when the contract is based on FOB terms, payment of the EFS is the buyer’s responsibility.
Another Meaning of EFS in Shipping
EFS also has another meaning in the maritime industry, namely Electronic Freight Security. As criminal activity in maritime transportation grows more frequent and brazen, the use of electronic freight security programs has become both necessary and common. Through such systems, continuous vessel monitoring and real-time tracking are enabled.
Reasons for Implementing an EFS Program
Statistics since 2008 indicate a rise in maritime theft. New threats inevitably require new countermeasures, as criminals continually develop more sophisticated methods to steal valuable cargo. Another significant threat is interference with vessel tracking systems. For this reason, the use of EFS has become highly important in the shipping industry. Accordingly, companies that must transit high-risk routes are advised to use insurance coverage and EFS solutions to ensure cargo security and prevent financial losses.
How EFS Operates in the Maritime Industry
This technology has become an integral component of maritime security systems, enabling round-the-clock monitoring of vessel activity.
Various technologies are employed to implement this system. Global Positioning System (GPS) technology and Internet of Things (IoT) tools work in tandem to ensure the security of cargo carried by a vessel. In addition to facilitating vessel monitoring, this system enables tracking of goods stored in cargo holds.
The EFS Team in Maritime Operations
A well-coordinated team facilitates the efficient achievement of objectives. The primary goal of an EFS team in maritime transportation is to ensure cargo security, with all members working toward this objective. Several key components of an EFS program, along with their respective responsibilities, are outlined below.
- Implementation: In this phase, optimal security measures are designed based on cargo type. Another responsibility of this section is selecting safe, reliable shipping routes. All information collected by this team is integrated into a web-based platform, enabling improved monitoring of vessel movement.
- Monitoring and Tracking: Real-time vessel behavior is continuously assessed in this section. In the event of any irregular activity, immediate notification is provided to the vessel’s crew.
- Emergency Alerts: This unit is responsible for issuing immediate alerts in the event of theft or detection of security system failures. Contacting law enforcement authorities also falls within the scope of this section’s duties.
Frequently Asked Questions Regarding the Concept of EFS in Maritime Transportation
EFS stands for Environment Fuel Surcharge, which is an additional charge imposed for the use of environmentally friendly fuel in vessels. This regulation was made mandatory by the International Maritime Organization in 2020.
Responsibility for payment of EFS depends on the contractual terms. Under CFR-based contracts, the seller bears the cost, whereas under FOB-based contracts, the buyer is responsible for payment.
Yes. EFS also refers to Electronic Freight Security, which involves electronic monitoring and tracking systems for vessels and cargo.
Given the rise in maritime theft and emerging security threats, EFS systems are critical for tracking cargo and ensuring its safety. These systems help prevent tracking disruptions and reduce potential losses.
EFS systems utilize GPS and Internet of Things technologies to provide real-time tracking of vessels and cargo. In addition to monitoring vessel location, these systems enhance the security of goods stored on board. What is EFS in maritime transportation?
Who is responsible for paying the EFS charge?
Does EFS have another meaning in shipping?
Why is the use of an EFS program important?
How does EFS operate in the maritime industry?
