Fuel Shockwave: Why Shippers Should Expect Higher Surcharges in January
Global bunker fuel markets have tightened sharply over the past month, with Brent crude and Singapore marine fuel rising 7–10% amid geopolitical tensions, refinery maintenance, and supply constraints in the Middle East and Asia.
For carriers, fuel makes up 35–45% of total operating costs, meaning any sharp increase triggers a recalibration of bunker-linked surcharges across global trade lanes.
From early January, most major shipping lines are preparing to adjust:
- BAF (Bunker Adjustment Factor)
- LSS (Low Sulphur Surcharge)
- In some cases EBS (Emergency Bunker Surcharge)
Preliminary industry guidance suggests increases of USD 50–120/TEU, depending on the lane, vessel type and carrier fuel index.
Asia–Australia and ISC–Australia trades are expected to feel the changes most noticeably due to longer sailing distances and tighter bunker supply availability.
For Australian importers, this lands on top of already elevated operating costs caused by currency weakness, port congestion and seasonal demand. Electronics, machinery, FMCG, textiles and automotive spares are particularly exposed because of high containerised volumes and short-term spot pricing.
Exporters—especially in agriculture and mining—will also feel it through rising backhaul surcharges and limited carrier flexibility.
While these fuel cost spikes are not unprecedented, they reflect a trend toward more frequent surcharge cycles as carriers adopt “dynamic bunker indexing.” For supply-chain managers planning Q1 budgets, the message is clear: bunker volatility is back, and it’s shaping freight rates more aggressively than earlier in the year.
What Australian shippers should do
- Reconfirm all January bookings, checking BAF/LSS applicability by carrier.
- Update landed cost calculations for all USD-denominated imports.
- Consider early shipments in December where possible to avoid Q1 surcharge impact.
- Exporters: lock in NAC/contract allocations early to offset surcharge variability.
Source: Global bunker indices & marine fuel market reports (e.g., Ship&Bunker, Platts, JLC reports)
Disclaimer – Market data is from public sources we consider reliable but has not been independently verified; accuracy is not guaranteed