TSA LINES SIMPLIFY FUEL SURCHARGE STRUCTURE

(The following is a reformatted version of a press release
issued by the Transpacific Stabilization Agreement and received
via electronic mail. The release was confirmed by the sender.) 
Transpacific Stabilization Agreement 
FOR IMMEDIATE RELEASE 
TSA LINES SIMPLIFY FUEL SURCHARGE STRUCTURE 
Effective January 1, lines will shift to a single-tier
intermodal component, folded into a single bunker charge. 
Oakland, CA / November 27, 2012 - Beginning January 1, 2013,
intermodal freight shippers in the Asia-U.S. container trade
will begin paying a single, consolidated bunker surcharge that
incorporates components for both low-sulfur fuel burned within
200-mile coastal limits, and long-haul intermodal fuel costs
passed through by inland transportation providers. 
Member shipping lines in the Transpacific Stabilization
Agreement (TSA) say the shift to a consolidated charge will
dramatically simplify how inland intermodal fuel surcharges are
assessed and collected, and provide customers with greater
clarity in forecasting their total freight costs. 
At present, TSA carriers assess a three-tiered intermodal fuel
surcharge (IFS) that is based on U.S. Department of Energy
weekly on-highway diesel fuel prices and the BNSF Railway
formula for fuel surcharges paid under intermodal contracts with
ocean carriers. Shippers pay either 1) a ‘West Coast/Group 4’
charge for short-haul inland moves in harbor areas and
throughout western coastal states; 2) an East and Gulf Coast
‘Reverse Inland Point Intermodal’ (RIPI) charge for short-haul
inland moves throughout the eastern and southeastern U.S.; or 3)
a long-haul inland point intermodal charge, recovering long-haul
rail fuel surcharges via the West Coast. 
Effective January 1, the Group 4 and RIPI tiers for the IFS will
be dropped, and the single, long-haul intermodal IFS tier will
become an ‘Intermodal Component’ to the TSA guideline bunker
charge. This component will be calculated in the same way it has
been since the IFS was introduced in 2005, converting the BNSF
formula - expressed as a percentage of the total intermodal rail
charge - into a per-FEU charge that is then added to the basic
marine bunker fuel charge. The Intermodal Component will only be
applied to long-haul inland point and minilandbridge shipments
from Asia moving via the West Coast. 
As a result, TSA’s bunker charge going forward will be expressed
in three parts: West Coast/Group 4; East Coast & Gulf/RIPI; and
West Coast intermodal. For the calendar quarter beginning
January 1, the West Coast Intermodal bunker charge will be $933
per 40-foot container, including a $538 marine bunker charge, a
$15 low-sulfur component and a $380 intermodal component. 
“Rather than have multiple, confusing charges that are
negotiated separately, carriers felt it would be in the best
interests of the trade as a whole to develop and assess a
single, simplified charge that focuses on the area of greatest
cost impact - long-haul intermodal rail fuel charges,” explained
TSA executive director Brian M. Conrad. “The formula is
unchanged and transparent, the costs are clear and verifiable,
and carriers will no longer be chasing short-haul charges that
often contribute only marginally to overall fuel cost recovery.
As we see it, everyone benefits.” 
Fuel-related charges for the calendar quarter beginning January
1 will be posted on the TSA website in the last week of
November, to provide the trade with at least 30 days’ advance
notice of any quarterly adjustment. At that time, the new bunker
charge will be posted under “Current Charges” and will include
both the low-sulfur and intermodal components incorporated into
a single charge. In addition, TSA will continue to track 13-week
inland fuel prices separately on the same “Surcharge Calculator”
page as always, so that customers can calculate the contribution
made by the Intermodal Component to the total bunker charge. 
TSA is a research and discussion forum of major container
shipping lines serving the trade from Asia to ports and inland
points in the U.S. More information on TSA can be found at
www.tsacarriers.org. 
Contact:  Niels Erich   T: 415.525.4520
Email: n.erich@comcast.net 
(kgt)NY 
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