Transpacific carriers shift to monthly reckoning for fuel surcharges

Transpacific carriers shift to monthly reckoning for fuel surcharges    Container shipping lines in the U.S./Asia freight market have announced a change in the way they calculate and adjust bunker and inland fuel surcharges.
   Effective May 1, members of the Westbound Transpacific Stabilization Agreement (WTSA) will shift from quarterly to monthly adjusted fuel surcharges, “in an effort to moderate cost impacts and make the surcharges more responsive to market conditions,” WTSA said.
   Fuel surcharges, added on to base freight rates, are designed to float with prices for marine fuel. Their purpose is to help carriers recover sudden and sustained fuel cost increases in a volatile market. Carriers typically apply two surcharges: one for marine “bunker” fuel used aboard a ship, and the other for truck, rail and diesel fuel used in shoreside and inland operations.
   “Fuel prices have been extremely volatile in recent months, often causing dramatic adjustments in ocean carrier fuel surcharges over a single    quarter,” said Albert A. Pierce, executive director of WTSA. “Reducing the lag time between collection of fuel price data and quarterly surcharge adjustments will make it easier for shippers to plan their costs, and help carriers keep pace with price fluctuations.”
   WTSA is a voluntary discussion and research forum of 11 container shipping lines. Members are APL, China Shipping Group, COSCO Container Lines, Evergreen Marine Corp. (Taiwan), Hanjin Shipping, Hapag Lloyd Container Linie, Hyundai Merchant Marine Co., Kawasaki Kisen Kaisha (“K” Line), Nippon Yusen Kaisha (NYK Line), Orient Overseas Container Line, and Yangming Marine Transport Corp.
   The Transpacific Stabilization Agreement, which represents 11 major container shipping lines serving the trade from Asia to ports and inland points in the United States, announced a similar move last week, also effective May 1.