Transpacific Lines to Adjust Fuel Recovery Surcharges July 1

Container shipping lines moving cargo from the U.S to Asia have announ
ced their quarterly fuel surcharge adjustments, to take effect July 1,
2000. The adjustments are intended to provide relief from rising mari
ne fuel prices during the past three months.
Member carriers in the Westbound Transpacific Stabilization Agreement
(WTSA) noted that, in the quarterly February-May reporting period, mar
ine fuel prices rose on average from roughly US$138 per ton to more th
an $151. The current level is also nearly double the $80 per ton lines
were paying as recently as third quarter 1999.
Accordingly, the shipping lines said they will individually raise fuel
charges now in effect by US$40 per FEU, $32 per TEU and $2 per revenu
e ton, for the calendar quarter beginning July 1. The increase will ap
ply to tariff customers, and to service contract accounts where applic
able under the contract terms-including customers with fuel surcharges
fully broken out from freight rates, and those paying special surchar
ges to float with world market prices for marine fuel.
Market research done earlier this year by WTSA carriers revealed that
westbound lines had seen an 80 percent increase in fuel costs per voya
ge between April 1999 and March 2000, covering not only vessel bunkeri
ng fuel but also marine diesel oil used to operate terminal yard vehic
les and equipment. As a result, carrier estimate they incurred during
that one-year period an added $500 million in fuel-related expenses, i
n what is the world? largest trade lane by vessel miles traveled and
voyage time at sea.
Lines said their fuel charges will continue to adjusted quarterly unde
r a formula that tracks average fuel costs at key transpacific load p
orts in light of carrier consumption pattems. Adjustments are based on
average fuel price fluctuations during a three-month reporting period
that ends 30-45 days prior to each effective date-January 1, April 1,
July 1 and October 1 - in order to provide ample notice to customers.
Marine fuel prices do not necessarily exhibit the same trends as seen
for more widely publicized crude oil and gasoline prices, because of d
ifferent refining and distribution cost structures.