ONE joins big 3 lines in levying emergency bunker surcharges

Japanese liner company ONE is the latest to impose an emergency bunker surcharge, joining industry giants Maersk, MSC and CMA CGM which all imposed surcharges last week. The charges, which it has billed as a Bunker cost Recovery Surcharge (BRS) will range between $20 and $60 per teu and will start taking effect from July 1 onwards.

"ONE has encountered progressive and significant inflation of fuel costs over recent months. Bunker fuel prices have increased by more than 25% during 2018 and could escalate still further," it said in a letter to customers.

ONE continued: "This sustained surge in fuel costs has greatly impacted our cost base.The escalating cost situation has now reached the point at which ONE are forced to respond by  adjusting our approach to bunker related pricing components."

ONE said it will implement these surcharges on all trade lanes except cargo from Mainland China, following Maersk's surcharge policy. The company however is differentiating itself from its competitors by imposing varying charges for the different trade lanes as well as excluding customers that have agreed to a floating BAF mechanism in their contracts.

Read More: Maersk and CMA CGM join MSC in levying emergency bunker surcharges

Transpacific, Transatlantic, Asia-Europe and Asia-Med services will all see surcharges of $50 per teu for dry containers while charges could be as high as $110 per teu for reefers on the European trades. Latin America and Africa trades along with the Asia-Oceania routes will see the highest charges of $60 per teu for dry containers while Intra-Asia will have the lowest charge of $20 per teu and Asia-Middle East comes in between with a charge of $40 per teu for dry containers.

The surcharge for reefers on the European routes is the highest among all the trades and higher than the charges of $90 and $85 per reefer teu charged across the board by Maersk and CMA CGm respectively.

"The BRS quantum will vary by trade lane and will be derived via a logical and equitable calculation mechanism.  In the meantime, The BRS will not be applied if a customer has a mutually agreed floating BAF mechanism in place as a part of their contract construction," ONE said.

"ONE continues to explore all avenues to mitigate fuel consumption and costs for the benefit of the environment and supply chain costs of our valued customers." ONE concluded.

According to Alphaliner figures, the earlier move by Maersk, MSC and CMA CGM would have covered 45.1% of capacity in the liner shipping market. With ONE joining in, another 7.0% of capacity will be affected, meaning 52.1% or more than half of global container line capacity will be applying so-called emergency bunker surcharges to deal with the sustained sharp rise in fuel prices. 

Posted 07 June 2018

© Copyright 2018 Seatrade (UBM (UK) Ltd). Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade.

Vincent Wee

Asia Editor, Seatrade Maritime News

Register here for free