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Issue #589

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New York Ports

NVOCC and Freight Forwarder Review

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2014 Media Kit
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WTSA lines shift to monthly fuel surcharge adjustments

By: | at 07:00 PM | Liner Shipping  

Calculation change will more accurately reflect current fuel prices.

Container shipping lines in the US-Asia freight market have announced an upcoming change in the way they calculate and adjust bunker and inland fuel surcharges. Effective May 1, 2006, Westbound Trans-Pacific Stabilization Agreement (WTSA) member lines 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.

Fuel surcharges, added on to base freight rates, are designed to float with prices for marine fuel and help recover sudden and sustained cost increases in a volatile market. Carriers typically apply two surcharges, one for marine ‘bunker’ fuel used aboard ship and the other for truck, rail and equipment diesel fuel used in connection with 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 WTSA Executive Director Albert A. Pierce. ‘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.’