The rise in crude oil prices that followed the Russian invasion of Ukraine is clearly seen in bunker fuel surcharges according to a new report by Xeneta.
The ocean and air freight rate benchmarking and market intelligence platform said across all trade lanes, the average fuel surcharges have risen close to 50%, reaching almost US$600 per FEU.
Xeneta noted that fuel surcharges include any surcharge related to bunkers, including but not limited to BAF, fuel recovery chargers, IMO 2020, and Emission Control Area.
"Some trades, such as the Far East to US West Coast trade, have seen an even larger increase in bunker surcharges, going from US$540 per FEU in January 2022 to US$1,150 per FEU in mid-May," it said.
Compared to freight, the fuel surcharge's share of the total shipping cost has climbed to 13%, up from 3% at the start of the year.
Xeneta said this is due to the fuel surcharge doubling, as well as the base rate falling nearly 23% since the start of the year.
"On the US East Coast, the fuel surcharge also accounts for a larger share of the total rate, up at 14% in mid-May (from 5% at the start of the year), averaging US$1,450 per FEU, up from US$650 on 1 January," Xeneta said.
"The longer sailing distance explains the slightly higher increase in this surcharge compared to the West Coast: up 122% to the East Coast compared to 117% for the West Coast – while still making 16% and 13% of the total rate, respectively," it added.
In its report, Xeneta further said the fuel surcharges on the backhaul trades have increased by even more than those on the front haul - rising 245% from the US West Coast to the Far East and 128% from the East Coast since the start of the year.
Despite these large increases, Peter Sand, chief analyst at Xeneta, said they remain a fraction of the fuel surcharges on the front haul: US$190 per FEU and US$200, respectively.
"As bunker prices remain high, these surcharges are unlikely to fall any time soon, and some shippers will be seeing even high surcharges. Even if they remain flat, they are likely to continue to account for an increasing share of the total rate as spot rates come down across the board," Sand added.
