Shipping and Logistics
SMU Survey Respondents Flag Fuel Surcharges as Costs March Higher
Written by Michael Cowden
March 27, 2022
Fuel surcharges continue to march higher along with increased steel prices and ballooning costs for raw materials such as ferrous scrap and pig iron.
Case in point: Wheeling-Nippon Steel’s fuel surcharge will increase to 24% effective with shipments on Monday, April 4.
“The surcharge will continue to be added to the freight on all invoices until further notice,” the Follansbee, W.Va.-based steel coating mill said in a letter to customers last week.
Wheeling-Nippon is hardly alone in raising fuel surcharges.
NLMK USA earlier this month announced that it would be increasing its fuel surcharge from 42% to 48%. The steelmaker – which operates mills in northwest Indiana and western Pennsylvania – made the increase effective with shipments beginning last week.
And Nucor said earlier this month that it would adjust its fuel surcharges more often in response to record prices.
The big jumps in fuel surchages comes as oil prices have skyrocketed upward from approximately $66 per barrel in November to more than $112 per barrel at the end of last week. Higher fuel costs stem in part from sacntions placed on Russia, one of the world’s largest oil producers, for the invasion of Ukraine.
SMU survey respondents have flagged higher fuel prices as among their primary concerns when it comes to supply chain challenges. Here are a few recent comments they provided when asked whether supply chain issues were getting better or worse:
“Getting worse and getting worse for several reasons. Fuel prices are number one; labor shortages, number two; and global issues, number three.”
“Everything from slitting to freight is getting worse.”
“It’s getting worse: availability of ocean vessels and costs are increasing rapidly. FSC (fuel surcharge) on domestic freight is out of control.”
“Getting worse domestically as truckers get more selective and as fuel surcharges for rail and barge are way up. … Several of the ports are still a major mess, primarily Long Beach (Calif.) but some others too.”
“Trucking is miserable.”
“Trucking is a nightmare.”
“Supply issues are certainly more complicated. … Worse if you have demand you are not prepared to supply.”
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
Read more from Michael CowdenLatest in Shipping and Logistics
Reibus: Flatbed, dry van rates ticked up post-hurricanes
After closing the third quarter -3.84% on a y/y basis, our first look at fourth-quarter flatbed spot rates puts us virtually flat y/y, coming in at -0.68%.
Leibowitz: Thorny issues remain as ILA-USMX talks kicked into 2025
On Thursday, the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX), representing carriers and port operators on the East and Gulf Coasts, announced a three-and-a-half-month extension of the recently expired collective bargaining agreement. The extension kicks the can down the road until Jan. 15, 2025, after the 2024 election and the certification of the results on Jan. 6.
Ports strike over as longshoremen reach tentative pact with employers
The International Longshoreman's Association (ILA) union and the United States Maritime Alliance (USMX) reached a tentative agreement on wages on Thursday evening. The move ends a strike at East Coast and Gulf Coast ports that began on Tuesday and that had threatened significant supply-chain disruptions.
ILA rejects 50% raise, strikes ports on East Coast, Gulf Coast
The International Longshoremen’s Association (ILA) launched a strike just after midnight on Tuesday at East Coast and Gulf Coast ports. The work stoppage spans from New England to New Orleans. It came after a last-ditch offer by the United States Maritime Alliance (USMX), which represents maritime employers, failed to meet union demands.
Calls for talks as coastwide labor strike could hit supply chains on Tuesday
Unless a last-minute deal is struck by midnight on Monday, a massive work stoppage will hit ports up and down the East and Gulf Coasts on Tuesday and cause widespread supply chain disruption. Master contract negotiations remain stalled between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX). The employer group took […]