US EXPORTERS to Asia will see changes in freight costs from January 1 as low sulphur fuel charges reflect larger vessels, slow steaming and stricter sulphur oxide (SOx) emissions from the United Nations but enforced by US and Canadian authorities.
Member shipping lines in the Transpacific Stabilisation Agreement's (TSA) westbound section are recommending a quarterly low sulphur charge of US$47 per FEU and $38 per TEU from the US west coast and $95 per FEU and $76 per TEU from the east and Gulf coasts from January 1.
The modified charge ?which may appear as an adjusted low-sulphur component within the bunker charge in some contracts during a transition period until those contracts expire.
This reflects both cost changes per container from larger ships, improved fuel consumption and longer transit times, and the shift to burning costlier marine gas oil (MGO) enforced in North American coastal waters as of January 1.
TSA’s current recommended low sulphur fuel charge in effect through December 31 is $21 per FEU and $17 per TEU from the west coast, and $24 per FEU and $19 per TEU from the east and Gulf coasts.
For its westbound fuel charges, TSA said it will retain its historic pricing for TEU at 80 per cent of the FEU level.
Containerships will need to switch to burning MGO during the six days of sailing within the 200-mile North American coastal zone from the west coast, and 10 days?sailing for an all-water east or Gulf coast service to meet the stricter UN limits devised by its agency, the International Maritime Organisation?(IMO).
Current MGO prices are $97 per tonne higher than fuel now in use and $365 per ton higher than standard bunker fuel for a typical west coast sailing.
For east and Gulf coast sailings, they are $340 higher than low sulphur fuel now in use and $372 per tonne higher than standard bunker fuel via the east and Gulf coasts.
TSA-Westbound will base its west coast charges on Los Angeles loading prices for MGO, as reported weekly by Bunkerworld. East and Gulf coast charges will be based on New York loading prices.
"Carriers anticipate a sharp, overnight rise in fuel costs as the stricter emissions standards take effect" said TSA executive administrator Brian Conrad.
"Lines must make sure these costs are adequately reflected in their pricing structures from day one," said Mr Conrad.
TSA-Westbound will also modify its quarterly bunker charge to reflect changing vessel and sailing characteristics, resulting in a slightly lower charge at current bunker price levels, and reduced price sensitivity in formula tiers going forward.
More information about TSA Westbound is at tsa-westbound.org.
TSA members are APL, "K" Line, China Shipping, Maersk, CMA CGM, Cosco, NYK, Evergreen, OOCL, Hanjin, Yangming, MCC, Hapag-Lloyd, Zim and Hyundai.
WORLD SHIPPING
04 November 2014 - 22:13
TSA lines re-jig westbound low sulphur fuel surcharge rates
US EXPORTERS to Asia will see changes in freight costs from January 1 as low sulphur fuel charges reflect larger vessels, slow steaming and stricter sulphur oxide (SOx) emissions from the United Nations but enforced by US and Canadian authorities.
WORLD SHIPPING
04 November 2014 - 22:13
TSA lines re-jig westbound low sulphur fuel surcharge rates
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