Following very disappointing Q1 results and a negative outlook for the year 2018, many shipping lines are implementing substantial rate increases. Various terminologies are being used to describe the surcharges
- EBAF (Emergency Bunker Adjustment Factor)
- EBS (Emergency Bunker Surcharge)
- EFL (Emergency Fuel Charge)
- FAF (Fuel Adjustment Factor)
- OCR (Operations Cost Recovery)
- PSS (Peak Season Surcharge)
The shipping lines explain their actions by increased bunker costs. Unfortunately there is no consistent approach applied by shipping lines and across the trades.
Gebrüder Weiss is in constant dialogue with its partner shipping lines and doing its utmost to mitigate the impact for the customers and the business. Given the development the industry needs to be prepared for floating BAF agreements going forward.
Ocean Freight Rate Outlook
- Asia – Europe: chaotic EBS/PSS implementation by various shipping lines to ease the cost pressure.
- Europe – Asia: rates are slightly softening to partly compensate on the emergency surcharge
- Asia – Latam: Capacity reduction to Mexico/WCSA through Maersk cancellation of AC5 plus frequent blank sailings by CMA/APL/COSCO/MSC and the approaching peak season causing rate to hike.
- Asia – N. America: Overall tight space situation. Carriers are planning GRI/PSS/EBS in end 2018. 2M has withdrew TP1/New Eagle service. Export boom due to new tariffs ex China.
- Asia – Middle East: Higher rate increase than expected due to higher bunker price.
- Intra – Asia: Congestion continues to ease at Shanghai port. To the Indian Subcontinent (IPBC) trade, space is tight from China/Hong Kong. There are also blank sailing plans in mid-Oct. Rate increases to be expected due to higher bunker rates.
