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 May logistics market update
Roughly halfway through Q2, flatbed rates are holding firm, currently showing no change from April to May and a slight increase quarter-over-quarter (q/q).
Reibus logistics update: Inflation makes a comeback
As we navigate through the first half of 2024, we are seeing early signs of an inflationary rate environment for flatbed shipping, albeit slightly later than anticipated. Excess supply has persisted longer than expected for both flatbed and dry van, resulting in rates remaining lower than for longer than anticipated.
SMU Community Chat: Posner talks state of global logistics
While shipping and supply chains have always been subject to wars, pirates, privateers, geopolitical issues, and natural disasters, it seems that “it’s been busier lately when it comes to dealing with significant supply chain disruptions,” according to logistics expert Anton Posner.
CRU: Baltimore bridge collapse affects more than half of US thermal coal exports
A container ship collided with the Francis Scott Key Bridge in Baltimore on March 26, causing it to collapse. This has blocked sea lanes into and out of Baltimore port, which is the largest source of US seaborne thermal coal exports. The port usually exports 1–1.5 million metric tons (mt) of thermal coal per month. It is uncertain when sea shipping will be restored. But it could be several weeks or more. There are coal export terminals in Virginia, though diversion to these ports would raise costs.
USW reaches tentative pact with CN Rail
United Steelworkers (USW) union members in Canada have reached a tentative labor agreement with CN Rail.