Emergency Fuel Increases Announced

Global steamship lines are universally announcing the implementation of emergency fuel surcharges (EFAF, EBAF, EBUC). Fuel prices have been rising on a global basis, and the price in 2018 is reported to be 45% higher than at the same time in 2017. While ocean cargo rates for the beverage sector have been fairly stable over the last year, we are now seeing the impact of the fuel price increase through either bunker charges increasing or the implementation of the emergency surcharge. While China has generally been excluded, most other trades are going to be affected. The emergency surcharge is in the range of 60 to 90 USD per TEU (twenty foot equivalent unit). If fuel prices drop, the emergency charge should be removed and most carriers are filing trigger points based on the bunker price (IFO 380/Rotterdam). 

For shipments moving to non-USA destinations, the implementation date announced is June 1, 2018. For shipments to the USA, the FMC requires a 30 day notification on any such surcharges and the effective date will be July 1, 2018.

The fuel increases are also affecting pick up costs and delivery costs on a global basis. Accompanied by the congestion and driver shortage in many locations, we are expecting a difficult and expensive summer and peak season in the logistics business.