“The increase in bunker price in 2018 has been significantly higher than what had been expected and has now reached a level of 440 USD/ton in Europe, the highest since 2014,” the company said in a customer advisory.
As informed, the increase is more than 20 pct higher when compared to the beginning of 2018.
Maersk Line said that due to the unexpected development it was no longer possible for the company to recover bunker costs through the standard bunker adjustment factors.
As such the EBS will be applicable to all cargo globally, effective June 1 2018 for non-Federal Maritime Commission (FMC) corridors and July 1, 2018 for FMC corridors, the company added.
Maersk Line’s move follows in the footsteps of Mediterranean Shipping Company’s (MSC) introduction of EBS a couple of days ago on all ocean and land-based cargo carriage with immediate effect.
“The continued surge in bunker prices has greatly impacted the operating environment for container shipping lines,” MSC said.
“Fuel prices are up more than 30 percent this year, and almost 70 percent since last June. (…) With crude oil today hovering around $80 a barrel – the highest since 2014 – the situation is no longer sustainable without emergency action.”
MSC said the last-resort measure was essential to ensure that the company navigates the challenging economic conditions in a steady and sustainable way.
“We continue to evaluate longer-term strategies to help ease the situation,” MSC added.
High bunker costs was one of the key factors that impacted A.P. Moller-Maersk’s earnings in the Ocean segment, which reached USD 492 million.
Søren Skou, CEO of A.P. Møller Mærsk, announced that in response to the current challenging market conditions the group is implementing a number of short-term initiatives to improve profitability.
These will include scaling down of capacity and charter deals as well as closing down of some services in order to drive the unit costs down. The company anticipates to cut the costs on annual basis by 2 pct.