APL passes on slow-steaming savings to shippers in surcharge reductions

APL, the container shipping arm of Singapore`s NOL Group, has devised a new bunker surcharge formula on transpacific trade routes to transfer savings made from slow-steaming to shippers by trimming surcharges starting July 1.

For example, the surcharge for a standard FEU shipped from Asia to the US west coast drops to US$538 from $568. The surcharge for a standard FEU shipped to the US east coast drops to $1,049 from $1,107.


The formula, based on Transpacific Stabilisation Agreement guidelines, reflects the use of additional capacity, capital costs and cost savings from slow steaming. It calculates how much per ton, per mile travelled and per TEU slow steaming has actually saved in contrast to every $20-per-ton movement in fuel price now, a $20 surcharge adjustment for west coast cargo. The new formula adjusted it to $14, which revised a surcharge of $38 down to $30.


"While not all our services are slow-steaming, many are," said Americas trade vice president Bob Sappio. "Considering the fuel consumption savings from slow-steaming, and the additional asset cost required, we have developed a more transparent approach, the result of which is some reduction in the cost but just as importantly, better visibility for our customers of the impact of slow-steaming."


The formula is subject to the rise and fall of fuel price, said the APL press release.