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Asia-Europe Bunker Surcharge Hits Record High

5/11/2011 9:49:11 AM

Ocean container carriers are levying record bunker fuel surcharges on shipping lanes between Asia and North Europe route, an industry analyst says.

 

The average Bunker Adjustment Factor will reach $776 per 20-foot equivalent container in June, up from the previous record of $766 applied by the now-disbanded Far Eastern Freight Conference in September 2008, according to Alphaliner.

 

The planned June BAFs range from a low of $703 per TEU to a high of $832, according to Alphaliner’s survey of 12 carriers.

 

The increases come as oil prices have hovered near $100 a barrel, up about 15 percent from a year ago despite a recent pullback in active commodity markets.

 

Between 2008 and 2011 average fuel prices have increased by 186 percent while the average BAF charge from Asia to North Europe has increased by 227 percent, Alphaliner said.

 

“BAF has remained a bone of contention for shippers, who argue it is used by shipping lines to generate additional revenue,” Alphaliner said. “Carriers maintain that it is used to recover additional bunker costs linked to unexpected fluctuations in the price of fuel.”

 

Although fuel prices plunged last week due to a broad sell-off in commodities, carriers are expected to continue to face fuel cost pressures in the next few months, the container market analyst said.

 

Spot freight rates from the Far East to north Europe are reported to have slumped to $900 per TEU from $1,300 earlier in the year due mainly to an oversupply of capacity.

 

The Journal of Commerce Online

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