Fri 29 Aug 2008, 11:37 GMT

Ferry operator raises fuel surcharge


Freight carriers hit with fourfold increase following 'exceptional' increase in bunker costs.



The Isle of Man Steam Packet Company has announced that it is to double its passenger surcharge from September 1st, whilst freight carriers will be hit with a fourfold increase.

The UK-based firm, which runs daily fast ferry services between Liverpool and the Isle of Man said freight fuel surcharge will increase by £6.00 per metre, to £8.00 per metre – or £40.00 per trade/unaccompanied car and low van. The passenger surcharge will increase by £2.50 to £5 per single journey.

These fuel surcharges are regulated by the Department of Transport by reference to the weighted average cost of marine fuel oil incurred over the previous six months and are determined by an agreed formula contained in the Fuel Surcharge Agreement between the Department and the Company. The September 1st increase will be reviewed in February 2009.

Chief Executive Mark Woodward explained: “World fuel prices have reached record levels in recent months, and in the marine transport sector the scale of the increase this year has been quite exceptional.

“Over the last decade, marine fuel costs rose from around $100 per metric tonne to around $600 per metric tonne by last year. This year has seen that price rise dramatically and it can now exceed $1,200 per metric tonne.”

Mr Woodward added: “The Steam Packet Company has absorbed much of the increased cost over the last few years, and since March this year has already absorbed several million pounds in extra costs, which it essentially cannot recover.

“We have made reference several times this year to the fact that surcharge increases would be inevitable, but we have not increased fares this summer even though fuel now costs as much as £15,000 per return trip to Liverpool. Other UK shipping companies increased their fares in the spring - we did not, even though marine fuel costs have almost doubled. Airlines have increased their fares and, regrettably, some have ceased trading.”

Captain Michael Brew, Director of Harbours for the Department of Transport, said a fuel surcharge agreement was signed by the Isle of Man Steam Packet Company and the Department in August 2005.

He said “This agreement sets surcharges on passengers and freight and tries to be fair and reasonable in their application. The level of surcharge is linked to the variable costs of fuel actually incurred. The agreement will ensure that any sustained reduction in fuel costs will lead to reduced surcharges at the next review.

“The company is not charging its full entitlement under the agreement as the company is not charging a number of categories of passenger and freight traffic, effectively absorbing the extra costs incurred.

“Based on the information regarding increased fuel costs supplied by the Isle of Man Steam Packet, information gathered from other sources and the formula contained in the Fuel Surcharge Agreement, the Department concurs with the surcharges for freight and passengers outlined by the company.”

The Isle of Man Steam Packet Company is the oldest continually operating passenger shipping company in the world, having began operations in 1830. The company is owned by long-term investors including Macquarie Bank and several Australian pension funds which invest via Steam Packet Group Limited, a Manx-based holding company.


Camellia Dream vessel. Norsepower completes factory tests for 18 rotor sails bound for Airbus fleet  

Wind propulsion units cleared for installation on LD Armateurs vessels targeting 50% emissions reduction.

Frankie Russ vessel. Ernst Russ acquires four chemical tankers with five-year charters worth $126m  

Hamburg shipowner enters tanker segment with methanol-ready newbuildings delivering from Q4 2026.

Ammonia fuel system component. Wärtsilä boosts ammonia engine power output to match LNG equivalent  

Finnish technology group raises Wärtsilä 25 Ammonia engine output, enabling simpler vessel designs.

Aerial view of a cruiseship at sea. Fincantieri secures order for three LNG-fuelled cruise ships from Princess Cruises  

Italian shipbuilder to construct vessels at Monfalcone yard, with deliveries scheduled through 2039.

Ubuntu Humanity alongside Fuelng Bellina vessel. DNV says existing LNG infrastructure can support low-GHG methane transition  

Classification society finds biomethane and e-methane compatible with current LNG fleet and bunkering networks.

IBIA bunker buyers working group graphic. IBIA launches Bunker Buyers Working Group for fuel procurement end users  

New forum aims to represent shipowners, charterers and ship managers in policy and regulatory discussions.

Carbon registry process diagram. MOL and Shell launch book-and-claim scheme for marine biofuel emissions credits  

Japanese shipping firm partners with Shell to offer environmental attribute certificates from third-party vessel operations.

Renewable Energy Directive (RED III) policy brief cover. Bureau Veritas releases report on EU Renewable Energy Directive’s impact on shipping  

Classification society examines RED III compliance challenges as member states transpose the directive into national law.

New York City skyline. IBIA to hold 2026 annual convention in New York  

The event marks the first time in recent years that the association’s gathering has been held in the Americas.

Port of Barcelona delegates. Port of Barcelona advances shore power rollout for cruise terminals  

Installation of OPS systems begins at MSC and Royal Caribbean terminals as port reorganises infrastructure.