Transpacific shippers who use 20-foot containers are likely overcharged on bunker fees, according to research by the maritime consultant SeaIntel.
SeaIntel noted the transpacific trade is the only one where surcharges on 20-foot containers are not 50 percent of those assessed on 40-foot containers. Instead, bunker adjustment fee (BAF) levels on the transpacific for 20-footers are 80 percent that of 40-footers.
SeaIntel said it was given two reasons for the 80 percent BAF calculation for 20-foot containers when it queried the Transpacific Stabilization Agreement on the matter.
One was that cargo handling, inland transport and other vendors all assess TEU charges to carriers at levels higher than 50 percent, typically at 80 percent. The second, TSA said, was that 20-foot containers potentially reduce the effective capacity of a vessel and therefore add to per sailing costs.
“According to the TSA, the bunker surcharge is devised with the express purpose to convert fuel price moves to container costs,” SeaIntel said. “In other words, the BAF should reflect fuel prices, and fuel prices only. The TSA is very transparent in providing their BAF formula for a 40-foot container and the assumptions underlying the formula. They do not provide transparency into why the 20-foot BAF is at an 80 percent level of the 40-foot BAF.”
SeaIntel argued that the TSA’s formula already compensates for a standard mix of different equipment sizes.
“In other words, TSA has already compensated for 20-foot inefficiencies in the formula,” SeaIntel said. “The formula is therefore designed for the 20-foot BAF level to be at 50 percent of the 40-foot BAF level.
“We can logically only arrive at one of two conclusions. The carriers are overcompensated by 30 percent on the 20-foot BAF – or they are undercompensated by 30 percent on the 40-foot BAF. Given the fact that 40-foot equipment is the prevalent equipment type in the transpacific, and the carriers’ strong focus on recovering costs from escalating fuel prices, it appears unlikely that they would have devised the 40-foot BAF to undercompensate by 30 percent and only match for the 20-foot containers,” SeaIntel said.
SeaIntel pegs the BAF overcompensation on 20-footers at $500 million over the past three years. – Eric Johnson
20-foot box shippers overcharged on fuel?
