April 2008

WTSA shipping lines to recover fuel costs

Major United States-Asia container shipping lines have taken steps to recover rising fuel costs by collecting a greater share of their published bunker fuel surcharges in cases where those surcharges have been partially or fully absorbed into ocean freight rates.

A US$200 per FEU adjustment will be applied to collected surcharge levels for wastepaper shipments. Proportionate adjustments will be applied to shipments involving other equipment sizes, and to cargo not rated on a per-container basis.

WTSA stressed that the scheduled adjustments still do not achieve full recovery of fuel cost impacts reflected in the Agreement’s published surcharge, which is set according to an established formula and adjusted monthly as world bunker fuel prices fluctuate. The formula has been in place, in its current form, since 2002 and is not intended to recover carriers’ entire fuel costs but rather to address price volatility that can add significantly to transpacific operating costs. Fuel today accounts for half or more of total fixed operating cost per transpacific sailing. World bunker fuel prices have more than doubled since 2005, and increased by 65% during 2007 alone.