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Transpacific Stabilisation Agreement ends publication of fuel cost formula
THE Transpacific Stabilisation Agreement (TSA), the quasi-transpacific rate-recommending carrier conference, will no longer publish its guideline formula for calculating fuel costs.
Beginning July 1, the TSA will offer only a single weekly average fuel price for the six million 40-foot containers (FEU) that travel the lane annually.
"Shippers need a more accurate method for determining actual market fuel costs within the world's second largest trade lane," Daniel Cullen, vice president of BreakthroughRFuel, an energy management company, which was cited in the TSA press release.
"The TSA West Coast calculated costs were an average across a trade lane and did not match market dynamics of benchmark port averages. The TSA's formula lagged the market as prices changed over time."
Due to changing market conditions and cost structures, the TSA determined it was unrealistic to rely on a single guideline formula to calculate fuel costs and will begin to post weekly average fuel prices as a resource.
The TSA will not continue to offer a benchmark formula that incorporates trade lane consumption characteristics such as average vessel size and transit time.
Beginning July 1, the TSA will offer only a single weekly average fuel price for the six million 40-foot containers (FEU) that travel the lane annually.
"Shippers need a more accurate method for determining actual market fuel costs within the world's second largest trade lane," Daniel Cullen, vice president of BreakthroughRFuel, an energy management company, which was cited in the TSA press release.
"The TSA West Coast calculated costs were an average across a trade lane and did not match market dynamics of benchmark port averages. The TSA's formula lagged the market as prices changed over time."
Due to changing market conditions and cost structures, the TSA determined it was unrealistic to rely on a single guideline formula to calculate fuel costs and will begin to post weekly average fuel prices as a resource.
The TSA will not continue to offer a benchmark formula that incorporates trade lane consumption characteristics such as average vessel size and transit time.
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