Maersk Will Pass on Bunker Savings Following Oil Price Drop

by Ship & Bunker News Team
Thursday November 13, 2014

A.P. Moeller-Maersk (Maersk) CEO Nils Anderson has vowed to pass on bunker savings achieved from falling oil prices, JOC reports.

"Falling bunker prices will be transferred to the customers, with some modest delays," said Andersen.

Low-sulfur prices at Rotterdam hit $456 this week, representing a fall of 17.6 percent, or $97, since October 3.

According to data from Ship & Bunker, bunker prices for key grade IFO380 at major ports has fallen almost 30 percent since hitting a 12-month high in June, as the oil price sunk this week to around $80 per barrel.

Anderson said the price of oil had come down quicker than anticipated but expected it to remain at around $80-90 per barrel for the next two years before climbing again.

The nature of the shipping industry means that gains from falling fuel prices will not last long.

"The carriers will compete this away and it will end up as price reductions," he said.

But fuel surcharges will still feature in Maersk's pricing as Emissions Control Area (ECA) rules push up bunker costs for an industry already operating on tight margins.

"The low-sulfur costs will have to be paid by customers," said Anderson.

"The container industry as a whole is very low on profitability and I don't see how it will be possible for most of our competitors to shoulder significant bunker price increases because of low-sulfur requirements, and we certainly don't intend to do it."

Maersk yesterday released its interim report for the third quarter of 2014, reporting profits for shipper Maersk Line of $685 million, including a $41 million contribution from bunker savings.

Ship & Bunker News Team
To contact the editor responsible for this story email us at editor@shipandbunker.com