Transpacific Shipping Lines to adjust fuel surcharges monthly

By Sarah Bowling, Web Editor -- Logistics Management, 1/30/2006

OAKLAND, Calif.—The Transpacific Stabilization Agreement (TSA) will begin adjusting bunker and inland fuel surcharges monthly instead of quarterly, effective May 1, 2006.

The TSA made the change in an effort to moderate cost impacts and make the surcharges more responsive to market conditions, said a company statement.

“This will not produce a net increase or decrease in the surcharge,” said Neils Erich, TSA spokesperson. “Instead shippers won’t face single, substantial changes in the surcharge quarterly.”

With quarterly adjustments in surcharges, if prices had been rising for the 13 weeks prior to the adjustment, shippers were hit with what could be a considerable change in surcharges, said Erich. Particularly when prices are escalating, a monthly system means shippers won’t feel the impact as dramatically.

Fuel surcharges, added on to base freight rates, are designed to float with prices for marine fuel and help recover sudden and sustained cost increases in a volatile market, according to the TSA.