Passing on oil price reductions
The freight forwarding associations Fiata and Clecat have called on the liner industry to relieve the burden imposed by Covid-19. With regards to the sudden decline of the price of very low-sulphur fuel oil (VLSFO), just after the steady rise in costs last year caused by the IMO 2020 low-sulphur regulation, the associations put forward: "The reality is that because of the one-to-two months lag in the calculation of bunker fuel surcharges, cargo owners and freight forwarders have not yet had a relief from the 35% drop in fuel prices of very low-sulphur fuel oil (VLSFO)."
Currently, with the drop in fuel prices, carriers are tied up to the bunker surcharge indexes based on high fuel prices. Willem van der Schalk, Clecat president, commented on the concerns of the European freight forwarding community by saying: "This gives rise to the suspicion that carriers are using the bunker adjustment factor (BAF) as a revenue-raising tool as well as a way to recover costs during the Covid-19 crisis." (mw)