Oil prices are spiking to a multi-year high of $80 per barrel and carriers are re-instituting bunker surcharges to compensate for the effects of higher fuel prices.
The increase means that, for an Asia-North Europe round trip, carriers would incur an additional cost of $500,000. This is combined with container lines being locked into long-term charters by shipowners and daily hire rates. Furthermore, feeder and barge operators providing haulage and rail services are also raising prices.
Although the bunker surcharges won’t be welcomed by shippers, the surcharges are seen by carriers as a better approach than to add a series of extra fees to invoices. They feel, and likely correctly so, that it would only add to the peak season, equipment imbalance, and congestion surcharges that have been common over the past year due to lasting effects of the pandemic that are still disrupting supply chains.
However, the spike in oil prices has led to a renewed interest in scrubber technology. Their cost savings offer carriers savings on fuel bills.
LNG, which has emerged as the leading alternative in a move towards decarbonization, has also seen prices jump due to shortages.
Expect to see bunker surcharges to be applied by all carriers in the immediate future.