Jones Act carriers eye increased fuel surcharges
Jones Act ocean carrier Horizon Lines said Friday that due to sustaining high oil prices it plans to raise its fuel surcharge to a record high in early February 2008.
The Charlotte, N.C.-based carrier notified its customers that as of Feb. 4, 2008, the firm's surcharge would increase by 3 percent to an all-time industry high of 32 percent. This is the fifth surcharge increase of 2007 for Horizon and caps a two year doubling of the firm's surcharge that sat at 15 percent in January 2006.
Oakland-based Matson Navigation Co. said it was reviewing rival Horizon's increase.
Pasha Hawaii Transport Lines, another Jones Act carrier which specializes in vehicles shipments between Hawaii and the Mainland, is also planning to reassess its fuel surcharge.
Both Matson and Pasha currently assess a 29 percent fuel surcharge.
Two weeks ago, Matson followed through on an October announcement and implemented a 5 percent fuel surcharge increase on its Hawaii, Guam/CNMI and Micronesia services. In putting the increase into effect, the carrier cited world oil prices that have hovered between $90 and $100 since the summer.
'Since making our initial announcement on October 19, fuel costs have risen an additional 24 percent,' Dave Hoppes, senior vice president of ocean services for Matson. 'In total, Matson's fuel related costs have risen over 36 percent since our last adjustment was announced in July.'
The fuel prices have affected the majority of shipping lines to one degree or another.
Ron Widdows, the chief executive officer of APL told an audience of importers on Nov. 13 in New York at the Annual Conference of the U.S. Association of Importers of Textiles and Apparel and American Import Shippers Association that container carriers moving cargo into the United States are going to take 'a heck of a beating' between now and next spring when shipping contracts renew because of the rising cost of fuel. He noted at the time that bunker fuel in the transpacific routes had risen as high as $514 in Singapore compared to around $280 for the year-ago-period. He projected that the extra costs were going to have a 'profound effect' on the shipping industry.
On Dec. 13, the Trans-Atlantic Conference Agreement said it would raise its bunker adjustment factors effective Dec. 16 through at least Jan. 15 in response to the rising fuel cost.
TACA's bunker rates for traffic to, from and via U.S. Atlantic and Gulf coast ports will be $752 (from $607) per TEU and $1,504 (from $1,214) per FEU or 45-foot container, with a weight-measure adjustment of $75 (from $61).
Rates for traffic to, from and via U.S. Pacific Coast ports will go to $1,128 (from $911) per TEU and $2,256 (from $1,822) per FEU or 45-foot container. The weight-measure adjustment will be $113 (from $91).
Horizon Lines, one of the nation's largest domestic ocean carriers and logistics firm, currently operates a fleet of 21-Jones Act container vessels in services connecting the U.S. Mainland with Alaska, Hawaii, Guam, Micronesia and Puerto Rico.