Maersk is increasing its fuel tariffs on the back of increased prices for very low sulphur fuel oil (VLSFO)
Maersk said in a notice on its website that the tariff increases will be seen across all trades – effective from 1 March 2020 – with an increase range between US$50-$200 per FFE, which it said reflected the increased fuel costs seen during recent weeks. It said the actual increases per trade will be communicated by the end of January.
It explained “As Maersk has communicated during the course of 2019, the switch of marine fuel to comply with the IMO low sulphur cap regulation effective 1 January 2020, would bring substantial cost increases for ocean shipping.
“Fuel cost would account for an even larger portion of the total freight rate. At the same time, we also anticipated increased volatility in the fuel price. To allow customers and Maersk to manage the volatility and cost exposure in a fair manner, the Maersk Environmental Fuel Fee (EFF) and the Quarterly Bunker Adjustment Factor (BAF) levels are subject to a monthly review and exceptional trigger if the price of compliant fuel (VLSFO – 0.5% sulphur fuel oil) moves up or down significantly during the quarter.”
Maersk said the trigger to activate the exceptional review on both cases is defined as a change of more than US$50/tonne on bunker prices compared to the last time both surcharges were adjusted.
In recent months, Maersk said it has seen VLSFO prices “increase substantially and more so in recent weeks”.
It noted that in particular, VLSFO price in Asia (Singapore) for a period exceeded US$700/tonne, more than a 20% increase compared to the previous bunker prices used for the BAF and EFF calculation. The average increase in January thus is expected to exceed US$50/tonne.
It summed up “Accordingly, Maersk will apply the additional monthly trigger defined in our BAF and EFF formulas and the new tariffs will be effective 1 March 2020.”
The ship operator uses Bunkerworld’s fuel price index 0.5% sulphur fuel oil for the BAF and EFF calculation. The period used for the calculation will be 26 December 2019 to 25 January 2020 and compared versus following figures: