Price Assessment

Southeast Asia to North America Bunker Charges

What are Southeast Asia-to-North America Bunker Charges?
Why are Platts Bunker Charges used in contracts?
How does S&P Global Commodity Insights assess the Platts Bunker Charges?
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S&P Global Commodity Insights Container Assessments

What are Southeast Asia-to-North America Bunker Charges?

The Platts Bunker Charges, or PBCs, are independent daily indexes providing the container market with better tools for managing exposure to volatility in bunker prices and container freight.

PBCs act as a replacement for the current Bunker Adjustment Factor (BAF) system, along with any other Low Sulphur Surcharge (LSS) and Marine Fuel Recovery (MFR) mechanisms.

They are an independent and fully transparent benchmark, which levels the playing field for shippers, carriers and logistics providers when it comes to negotiating bunker charges in container freight.

Why are Platts Bunker Charges used in contracts?

The biggest problem with current bunker adjustment factor (BAF) methodologies is a lack of standardization and transparency in underlying formulas. Shippers and logistics companies, therefore, face a multitude of indications and formulas, with quotes for the same routes sometimes being vastly different.

As a result of those factors, negotiations can be frustrating. In contrast to BAFs, the daily Platts Bunker Charges allow industry players to easily factor fuel costs into freight contracts, ensuring that they are tracking bunker price movements.

How does S&P Global Commodity Insights assess the Platts Bunker Charges?

S&P Global Commodity Insights factors in a range of variables including relevant bunkering ports, loading and discharge ports, vessel speed, vessel size, fuel consumption weighted by fuel type and distance steamed in emissions controlled areas in calculating the Platts Bunker Charges. These assessments are regularly updated to reflect market practice and new regulations.