Fuel Burn: Climbing Marine Fuel Prices Hit Aussie Supply Chains Hard
Marine fuel prices have surged again, pushing carriers to issue higher bunker-linked surcharges across global trade lanes. Singapore’s VLSFO index has climbed steadily over the past month, prompting shipping lines to adjust BAF, LSS and related fuel surcharges effective mid-January.
For Australian shippers, this is adding fresh cost pressure at a time when freight markets were only beginning to stabilise.
Importers are feeling the cost crunch most immediately. Goods priced in USD — including electronics, machinery, homeware, and FMCG — now attract higher freight add-ons, directly inflating landed costs. Many businesses, particularly in retail and industrial sectors, are reassessing their order quantities or forward budgets.
Exporters face their own challenges. Although a weaker Australian dollar improves competitiveness, rising fuel surcharges can erode some of the advantage. Agricultural exporters — beef, dairy, fruit, grain and seafood — are particularly exposed due to high reefer energy demand and longer travel distances to Northeast Asia and the Middle East.
Several carriers have indicated potential further adjustments if fuel prices remain elevated, leaving supply chain planners bracing for continuing volatility.
What Aussie Businesses Can Do
- Update landed cost models weekly, not monthly.
- Secure early bookings where BAF/LSS rates are locked temporarily.
- Consider partial hedging for high-volume import cycles.
- Exporters: negotiate longer validity windows or bundled rate structures where possible.
Source: Global bunker price indexes & carrier surcharge notifications
Disclaimer – Market data is from public sources we consider reliable but has not been independently verified; accuracy is not guaranteed.