APL unveils slow steaming bunker formula
Container shipping line APL said Friday it will implement a fuel surcharge formula in the transpacific trade in July to account for the financial impact of slow steaming.
The new formula results in a somewhat lower bunker surcharge, effective July 1, than would have been assessed under the previous formula, which was based on a guideline from the Transpacific Stabilization Agreement.
For example, the surcharge for a standard 40-foot container shipped from Asia to the U.S. West Coast drops to $538 from $568. The surcharge for a 40-footer shipped to the U.S. East Coast drops to $1,049 from $1,107.
APL said it has developed the new surcharge formula to reflect the cost savings as well as the added capital costs associated with slow steaming. As ships reduce speed, additional vessels are generally required to be added to each loop to maintain weekly arrival schedules.
'While not all our services are slow steaming, many are,' said Bob Sappio, vice president of Pan-American trades at APL. 'Considering the fuel consumption savings from slow steaming, and the additional asset cost required, we have developed a more transparent approach, the result of which is some reduction in the cost but just as importantly, better visibility for our customers of the impact of slow steaming.'
APL said its surcharge will continue to rise and fall in line with fuel price fluctuations.
For example, every $20-per-ton movement in fuel price has resulted in a $20 surcharge adjustment for U.S. West Coast cargo. With the new formula, APL said the adjustment will only be $14. For U.S. East Coast cargo, the sensitivity is reduced from a $38 surcharge adjustment for every $20-per-ton movement in fuel price to a $30 adjustment.