The 10 ocean carrier's in the Westbound Transpacific Stabilization Agreement on Wednesday announced steps to recover rising fuel costs by collecting a greater share of their published bunker fuel surcharges in cases where those surcharges have been partially or fully absorbed into ocean freight rates.
From April 1, the WTSA lines intend to collect an additional $300 per 40-foot container (FEU) in bunker surcharges -- toward WTSA's full, published bunker surcharge level -- for agricultural products, chemicals, clay, forest products, hay, metal scrap, plastic scrap and freight-all-kinds (FAK) mixed container shipments. A $200 per FEU adjustment will be applied to collected surcharge levels for wastepaper shipments. Proportionate adjustments will be applied to shipments involving other equipment sizes, and to cargo not rated on a per-container basis.
The WTSA said the scheduled adjustments still do not achieve full recovery of fuel cost impacts reflected in the agreement's published surcharge, which is set according to a monthly adjusted formula established in 2002. The agreement said the formula is designed to react to fluctuations in world bunker fuel prices, which have more than doubled since 2005, and increased by 65 percent during 2007 alone. It added that fuel currently accounts for half or more of the total fixed operating cost per transpacific sailing.
"Fuel surcharges are higher in other major trade lanes, such as Asia/Europe or intra-Asia, yet have been fully collected in most instances. In the more competitive, price-sensitive transpacific freight market, surcharges have frequently been eroded or not taken into consideration in the course of overall freight negotiations," the WTSA said.
"In many of the westbound commodity categories listed above, freight rates are not much higher than the total prorated fuel cost of moving an empty container from the U.S. to Asia aboard ship. For this reason, lines argue that it is imperative to recover the full level of surcharge and that surcharges be broken out from freight rates and allowed to float with world prices."
WTSA members are: APL, COSCO Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, NYK Line, OOCL and Yang Ming
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