In the previous articles we looked into how bunker buyers unknowingly pay more for the fuel bought, either by buying fuel with a low energy content or by suffering losses due to density short-lifts. However, the total cost of fuel is also influenced by the additional charges and fees, which vary significantly by port and often between suppliers in the same port. Additional costs are generally known at the point of enquiry however these are sometimes overlooked when planning or buying bunkers, resulting in overpayments.
Additional fees can significantly add to stem cost
A sample of over 6,000 stems globally covering the first half of 2021 has been analysed of which over 30% were found to contain some sort of additional fee.
These fees typically include barging, port charges and dues, various taxes and surcharges, among others (Figure 1). On average, among the stems with additional fees the cost of the fuel itself contributes around 92% to the total stem value, however this varies dramatically by stem.
Knowing where additional costs can hit hard is critical to buying bunkers competitively, particularly when it comes to the barging fees as these on average represent over 5% being by far the largest contributor of all non-fuel related costs.
Depending on the port, barging fees are often charged on a tiered basis with the lumpsum charges for up to a certain quantity and a $/mt charge for the quantities above.
In a number of ports in Americas different suppliers charge different barging fees (example New York), which makes it even more difficult for a bunker buyer to calculate the true cost of bunkers and compare suppliers between themselves. The problem is compounded by additional fees and taxes that are often chargeable as a percentage of the total stem value.
Additional fees in the bunker industry ironically remind of the fee structure when ordering a takeaway delivery online. To what otherwise looks like a cheap meal one needs to pay extra for a side, the platform then charges delivery and service fees, and because demand is high it gives an option to pay extra for prioritised delivery. In the end, what initially looked like a good value lunch becomes a relatively expensive meal overall.