Announcement of bunker adjustment surcharge

In response to the fluctuating bunker prices and to reasonably compensate for our soaring bunker costs, COSCO SHIPPING Lines is going to introduce a Bunker Adjustment Surcharge from January 1st, 2019 aiming at truly reflecting the variations in bunker costs and facilitating our clients to calculate their logistics costs.

 

I. Calculation Formula

Calculation formula is as following:

Bunker Cost Variation /TEU * Trade Lane Adjustment Factor

 

This formula is a result of comprehensive consideration of all involved factors including bunker price fluctuation, actual Bunker consumption, trade balance and loading fact.

 

In respect to the practical habits, this surcharge will be given different codes in different trade areas. For example, BAF in TP or AUS & NZ trades areas ( For TP trades, reference is made to our filing result at FMC ), BUC in Latin America and FAF in the rest of trade areas.

 

II. Adjustment mechanism

Bunker price will be reviewed at monthly interval. A fluctuation over 30USD will trigger an adjustment. (Please contact trade division concerned for more details.)

 

III. Bunker Price

The Bunker price referred in the formula will be a monthly average of price index at major ports including Rotterdam and Singapore, etc.

 

IV. Reefer cargos

According to the average power consumption of reefer equipment, the bunker adjustment surcharge for reefer cargos will be 1.5 times of dry cargo.

 

V. Examples

Examples of calculation result from October 15 to November 15, 2018 when the average Bunker price stood at USD400/TON.