General Notice 1/2019
Zentner Shipping has received notification from ASC Liner Services in Singapore, of an increase in the base rate for shipping containers for both Cocos and Christmas Island. ASC Liner Services have also advised they will introduce a CAF and BAF surcharge.
A copy of the letter from ASC Liner Services is attached here for your information.
The base rate increase covers general operating costs of the ship, in particular, port congestion, weather delays and additional pilotage and mooring/unmooring costs at Christmas Island.
The CAF surcharge, or Currency Adjustment Factor, is a standard shipping industry mechanism to offset changes in the exchange rate between the US dollar and in our case the Australian dollar. Ship charter and the majority of ship expenses are paid in US dollars and with the current fall in the exchange rate, this has caused the cost of these payments to increase in Australian dollar terms.
BAF or Bunker Adjustment Factor, is a similar rate mechanism that accounts for the changing price of fuel for the ship. The price of ship fuel or bunkers as it’s known, has increased strongly of late and with the need to switch all ships to IMO2020 compliant low sulphur fuels from January 2020, this situation will only compound. This is similar to the road transport industry, which currently have a fuel levy on freight costs of 10% to cover the variable cost of diesel fuel.
The rise in container rates will affect the LCL and break bulk rates to both islands. Once the updated rates are determined they will be advised in a further notice.
The new rates will be take effect from voyage BK1905.
Rate increases are always difficult, however to maintain a viable long term shipping service to the Islands we need to cover these additional costs.
We remain committed to providing your shipping requirements through 2019 and beyond.