Shipping Lines Revise Fuel Charge Structure

Member container lines in the Westbound Transpacific Stabilization Agreement (WTSA) are taking a fresh look at bunker fuel charges that, since 1988, have helped offset rapid, unexpected spikes in world fuel prices. After reviewing the pricing mechanism, carriers have revised the calculation formula to reflect costs more accurately; adjust more quickly to recover rising costs for carriers — and pass on savings to shippers when prices fall; and make it simpler to predict charge adjustments.

The new bunker charge took effect Jan 1, 2001, for cargo moving under standard carrier tariffs and will be applied to all contracts by no later than May 1, 2001. It will be a separate charge, on top of freight rates, that will be allowed to “float” with fuel price fluctuations and be adjusted quarterly.

Most customers are likely to see an initial increase in the charge they now pay, by about $45 to $65 per 40-foot container, and equivalent amounts for other sizes.

The revised bunker charge formula adds the new ports and weights them according to carrier consumption patterns; gives added weight to MDO costs; and moves up the reporting period to end 30 days before the subsequent adjustment date. The new formula also takes into account changes in vessel size, route configurations, transit times, and other factors.

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