Emergency bunker surcharge needed to ensure continued service: Maersk
4th June 2018 08:44 GMT

Danish container shipping company Maersk Line said emergency bunker surcharges imposed last month to recover costs from rising fuel bills are necessary to ensure "continued sustainable service" for its customers.

Maersk announced a surcharge of $120/FEU for dry containers and $180/FEU for refrigerated cargo last month to compensate for higher fuel bills driven by sharp gains in crude prices over the past year. Most of the world's largest container lines have imposed similar surcharges.

Some of the container industry's customers have baulked at the surcharges, saying existing bunker adjustment factor arrangements should cover variations in fuel prices.

"The bunker cost increase for Maersk Liner Business is more than 20% since the beginning of 2018", Lars Oestergaard Nielsen, president of Maersk Line in Latin America and the Caribbean, told S&P Global Platts Friday. "The emergency bunker surcharge is a necessary action to ensure a continued sustainable service to our customers, and will only cover the extra costs."

Maersk Liner Business includes Maersk Line and other affiliated container lines also owned by parent group AP Moller-Maersk.

"We are following the market trends closely and will adjust the tariffs as soon as the fuel price drops below the beginning level of the year," Nielsen added.

Maersk's surcharge is based on a delivered high sulfur 380 CST fuel oil price at Rotterdam of $440/mt. The surcharge will be reduced to zero if that price drops below $370, but it will be doubled if the price rises above $530/mt.

Platts assessed the price at Rotterdam at $426/mt on Friday, down from this year's high of $443/mt on 22 May but up from $361/mt at the end of 2017.

Are container lines justified in their use of emergency bunker surcharges to cope with rising fuel bills this year?