Shipping lines raise bunker surcharge again

By Stanley Carvalho Abu Dhabi - Rising bunker rates brought about by surging oil prices have forced shipping lines operating between India and the UAE to again increase the BAF (bunker adjustment factor) on the West Africa route. Also, an emergency BAF of $50 per TEU will be imposed on October 15 by shipping lines trading from the UAE to Red Sea ports. This is the second increase in BAF this year on the West Africa route following that introduced in February.

The increase in BAF will hit shippers (forwarding lines and clients who ship cargo directly), who will have to bear this additional cost. Effective October 9 the BAF will rise to $100 per TEU, according to shipping industry sources. "This is part of the endeavour by participating lines to partly recover additional costs imposed due to the prevailing high bunker prices," a joint notice said.

The leading shipping lines on the India/UAE and West Africa sector are Maersk Sealand, Messina, Delmas and Gold Star.

Bunker rates have been rising along with oil prices. Currently they hover around $170 per tonne (weekly average Fujairah price), while diesel oil prices average about $315. Fuel oil prices averaged between $70-$80 per tonne last year.

"Only a fall in oil prices can flatten bunker prices after which the emergency BAF can be withdrawn," said a senior executive of a leading shipping line.

http://www.gulf-news.com/

-- Martin Thompson (mthom1927@aol.com), October 07, 2000