TSA Members introduce westbound Low-Sulfur Charges

Member shipping lines in the Transpacific Stabilization Agreement (TSA)’s westbound section have recommended a quarterly low-sulfur charge of USD 47 per 40-foot container (FEU) and USD 38 per 20-foot container (TEU) from the U.S. West Coast, and USD 95 per FEU and USD 76 per TEU from the East
and Gulf Coasts, effective January 1. U.S. exporters shipping container cargo to Asia will see changes in their overall freight costs beginning January 1, 2015, as current low-sulfur fuel charges are adjusted to reflect larger vessels, slow-steaming and stricter sulfur oxide (SOx) emissions standards.

The modified charge – which may appear as an adjusted low-sulfur component within the bunker charge in some contracts during a transition period until those contracts expire – reflects both changes in per container operating costs from larger ships, improved fuel consumption and longer transit times, and the shift to burning cleaner, costlier marine gas oil (MGO) mandated within North American coastal waters as of January 1.

TSA’s current recommended low-sulfur fuel charge in effect through December 31, 2014 is USD 21 per FEU and USD 17 per TEU from the West Coast, and USD 24 per FEU and USD 19 per TEU from the East and Gulf Coasts.

 For its westbound fuel charges, TSA said it will retain its historic pricing for 20-foot equipment at 80% of the FEU level. Container ships will need to switch to burning MGO during the approximately six days of sailing within the 200-mile North American coastal zone from the West Coast, and ten days’ sailing for an all-water East or Gulf Coast service, to meet stricter 0.1% SOx emissions limits under the International Maritime Organization’s MARPOL Annex VI treaty.