What are emergency bunker surcharges (EBS) by shipping carriers?

The term “bunker” has a historical origin that dates back to the industrial revolution steamships that used the power of steam to travel across the ocean. The first steamship produced steam by burning coal that was stored on board a container called a “bunker”. Over the years, the word “bunker” became synonymous with “ fuel ” and the term has stuck. So when you see the word “bunker”, think “fuel”. Today, carriers have implemented what is called an "emergency bunker surcharge" to help them cover the cost of rising fuel prices.

What is the difference between a bunker adjustment factor and an emergency bunker surcharge?

Most large ocean vessels are powered by varying types of marine fuels and oils. Oil prices fluctuate rapidly for a number of reasons - factors as uncontrollable as the weather or geopolitics can have a massive influence on the price of oil . Since fuel is a huge portion of a ship’s operating cost, ocean carriers currently do their best to mitigate these price swings with a bunker adjustment factor (BAF) surcharge. By contrast, an emergency bunker surcharge (EBS) is a last-minute fee that occurs when actual market fuel prices are higher than was originally anticipated by the carriers.

How much do emergency bunker surcharges cost?

Costs vary by cargo and container type and whether the cargo is dry or reefer . Costs also vary by carrier but most shippers should expect prices to be in the $50-$60 range for 20’ dry containers and the $90-$180 range for 40’ dry containers. The carriers will normally send out emergency bunker surcharge announcements of the exact charges.

Why are carriers announcing Emergency Bunker Surcharges right now?

Carriers are announcing EBSs right now for a number of reasons. The main reasons are high fuel prices, new emissions stands, and declining spot rates.

What are Emergency Bunker Surcharges (EBS)?

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What are emergency bunker surcharges (EBS)?

By Roxana Pillay

Roxana Pillay, a forwarding coordinator with 12+ years in shipping, began with cereal imports and now handles South African exports. She recently earned runner-up in the Trade and Finance Global Accelerate scholarship and is studying sales and marketing at the University of South Africa. Outside work, she enjoys family time, cooking, gym, and reading.

Last updated on 22 Aug 2024

04 Oct 2018 5 min reading time

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