Explaining the prices rises, MSC added: “Fuel prices are up more than 30pc this year, and almost 70pc since last June. [Ship fuel] prices in Europe exceeded $442 per metric ton last week. Crude oil is hovering around $80 a barrel — the highest since 2014.” Warning its customers of higher charges, Maersk said the increase in ship fuel prices was “significantly higher than expected”, hitting $440 per ton. Almost 90pc of the world’s good trade travels by sea, and the higher fuel costs are ultimately likely to be passed on to consumers, with other shipping lines following suit.
The oil price has risen almost 50% so far this year following increased tensions in the Middle East and the collapse of the Iran nuclear sanctions deal.
Since 2009, the price of a ton of bunker fuel from Asia to the US West and East and Gulf coasts has on average been 5.7 times greater than the price of a barrel of Brent crude oil. Assuming that multiplier and the IHS Markit forecast holds, the average cost for bunker fuel in 2017 should come to $330 per ton. Such an increase would raise the current BAF for 20-foot containers to $292 from $238 and to $324 from $264 for 40-foot boxes to the West Coast, according to the BAF surcharge calculator of the Transpacific Stabilization Agreement. To the East Coast, the BAF would rise to $537 from $473 for 20-footers and from $525 to $597 for 40-footers.
In order to address the trend in increasing fuel costs over the last decade, most shipping companies began restructuring their operations to create fuel efficiencies:
- Consolidated services through multi-carrier alliances.
- Consolidated routes to serve more locations with fewer ships.
- Improved monitoring of hull and propeller conditions to reduce resistance and improve efficiency.
Beyond rising costs, higher bunker prices are problematic for container lines because of the delay between when fuel prices rise and when the container lines are able to pass those increases off to customers. This means container lines must spend billions of dollars on more expensive fuel without necessarily having the funding needed to offset the increase, according to maritime analyst SeaIntel.