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TSA carriers bemoan fuel costs

TSA carriers bemoan fuel costs

   Transpacific Stabilization Agreement (TSA) carriers said Thursday that crippling fuel costs will force them to implement a revised method for applying fuel surcharges as they seek to recover millions of lost dollars.

   “Fuel prices are rising faster and higher than quarterly adjusted surcharges can adequately address,” the TSA said. “Sharp price increases over time leave carriers paying out millions of dollars in advance fuel costs as they recover lower prices that were in effect two to three months earlier,” TSA said.

   The liner conference said its 12 member lines are reviewing current calculation formulas and existing contracts, and will be approaching customers to discuss possible options.

   Albert A. Pierce, TSA’s executive director said the rising fuel cost has replaced congestion as the major difficulty facing the container shipping industry. “In the past year lines felt their top priority was to address infrastructure and congestion issues … Congestion has eased, but the fuel bill per round trip is much higher,” Pierce said.

   According to the TSA, the average price of marine bunker fuel at the nine most commonly used loading points in the transpacific trade lane has jumped 74 percent since the start of the year, from $198 per ton to $344 per ton. Ocean carriers have also been hit by rail and trucking companies passing down fuel surcharges for intermodal moves, the TSA said.

   “Escalating fuel costs, and the passing through of those costs by rail, truck and other vendors, is creating an unsustainable situation that ocean carriers must address even before a new round of contract talks for 2006-2007 begin,” the TSA said.

   TSA members are: American President Lines, CMA CGM, Kawasaki Kisen Kaisha, COSCO Container Lines, Nippon Yusen Kaisha, Evergreen Marine, Orient Overseas Container Line, Hanjin Shipping Co., Hapag-Lloyd, Mitsui O.S.K. Lines, Yang Ming Marine and Hyundai Merchant Marine.