Home » Maritime » Domestic shippers face 50% hike in bunker surcharge

MEMBERS of the Philippine Liner Shipping Association (PLSA) are set to impose a 50% increase in the bunker surcharge as early as next month.

A ranking PLSA official told PortCalls the hike is long overdue since the fuel price threshold set by the Maritime Industry Authority (Marina) for any rate adjustment had been breached many times over.

Marina allows shipping lines to implement rate-recovery adjustments of between 8% and 11% depending on the movement of fuel prices, thanks to Republic Act 9295 or the Domestic Shipping Act of 2004. The law deregulated the rate-setting mechanism for carriers but still requires publication of the rate adjustment seven days before its implementation.

"We expect fuel to be one of our biggest concerns as we start the new year," the source who requested anonymity said. "That is why we are applying for an increase in our bunker surcharge."

"Carriers are now forced to impose the surcharge as we can no longer shoulder the extra cost (arising from fuel price hikes)… we have been delaying the implementation (of the higher bunker surcharge) even if we are allowed by policies to (do so)," the source explained.

"This could be (seen as) a blessing in disguise because based on our computations, our proposed increase is lower than if we had imposed the allowed percentage every time the threshold was breached."

At the moment, the average bunker surcharge for every twenty-foot equivalent unit is P3,000. The last time carriers increased the bunker surcharge was in 2009.

PLSA member lines set to impose the additional surcharge are Negros Navigation, Lorenzo Shipping Corp, NMC Container Lines, Oceanic Container Lines, Solid Shipping Corp and Philippine Span Asia Carrier Corp (formerly known as Sulpicio Lines).

Cargo volumes of local carriers have returned to their pre-crisis levels, with a full recovery seen next year. PLSA members are, however, taking a prudent approach to expansion with much volatility still existing in the global economy.

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