Supply Chain Research

CMA-CGM and MSC have outlined new fuel price surcharge formulae that specifically link fuel costs, which in the future will include low-sulfur fuel oil, to shipping rates. CMA-CGM’s approach uses a three month trailing average applied one quarter in arrears. That would imply a 2.4% increase in rates for 1Q 2019 vs. 4Q 2018 and would need to increase by 4.6% for every 10% points of low-sulfur fuel oil included in the fuel cost basket from 2020 onwards. The bigger issue is whether customers will accept rate increases at all. Analysis of the changes in shipping rates on a weekly, monthly an...