January 28, 2020
Price swings in the largest market for marine fuel are filtering down the supply chain as major ocean carriers ask customers to cover costs for using low-sulfur fuel blends.
Maersk last week said in a customer advisory that ocean freight tariffs across all trade lanes will increase by $50 to $200 per forty-foot equivalent unit (FEU) starting March 1 due to a price spike for low-sulfur fuel in Singapore. The International Maritime Organization mandated fuel with a 0.5% sulfur cap be the global standard effective this year.
The “trigger” for the tariff surcharge, Maersk said, is a swing in fuel prices in the largest global marine fuel market. Low-sulfur fuel prices increased “substantially” in Singapore, exceeding $700 per metric ton, more than 20% higher than previous benchmark fuel prices.
“The average increase in January thus is expected to exceed $50 per metric ton,” Maersk said.
Hapag-Lloyd is also said to be considering a similar surcharge, according to ShippingWatch, although its surcharge amount has not yet been determined.
Yet in the same week that Maersk announced the new surcharges, Singapore fuel oil prices dropped close to $100 per metric ton, from a Jan. 7 peak of $740 per metric ton to $641 on Jan. 22, according to international shipowner association BIMCO.
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Source: American Shipper