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As a convenience for regular visitors to this site using the new formula bunker charge calculator function going forward, we offer the two necessary links here - to the Bunkerworld/TSA weekly average fuel prices, and to the new formula calculation table in TSA's revised fact sheet - for converting 13-week average fuel prices to the upcoming quarterly bunker charge. http://www.bunkerworld.com/markets/tsaindex/
More information on the new formula is provided below and in the new fact sheet. Customers continuing to use the existing bunker charge formula during this transition period will find both weekly fuel prices and the calculation table in the righthand column of this page, as before. A New Formula TSA has made refinements to its bunker charge formula, effective April 1, 2009 for tariff cargo and as contracts are signed and renewed going forward. Specifically, TSA has modified the the calculation formula to make it simpler and more transparent, based on fewer variables and a straightforward calculation involving average carrier service characteristics in the trade (see below). The new charge is to be adjusted on a quarterly basis, as it was historically until May 2006 when fuel price volatility made more frequent monthly adjustment necessary. Each quarterly charge will be based on the average West Coast and East/Gulf Coast bunker prices collected over a 13-week period ending 30 days before the effective date. This is done to provide 30 days’ advance notice to the trade of any adjustment up or down. When the modified formula takes effect in the new contracts, the adjustments will be based on the following schedule:
Separate charges have been established for cargo moving to the U.S. West Coast (local and intermodal) versus all-water via either Panama or Suez to the U.S. East and Gulf Coasts. Weekly prices will be posted on this page, or can be obtained from Bunkerworld at www.bunkerworld.com/markets/tsaindex/ A new TSA bunker charge fact sheet has been posted in the Fact Sheets section of this site, which includes full calculation details; the new conversion table showing the new fuel cost and charge tiers; an explanation of the price sensitivity analysis leading to creation of those tiers; and frequently asked questions. Users will be able to track weekly prices, and to calculate or verify new charge levels. In calculating the upcoming bunker charge under the new formula, please use the weekly average West Coast and East/Gulf Coast fuel prices in the table above right, and apply them to the bunker charge table in the New Fact Sheet. As an interim step the two similar conversion tables are being kept separate to avoid confusion as this page is being re-designed. Going forward, users will be able to simply:
More detail about the underlying assumptions and mathematical calculations behind the new TSA bunker charge formula can be found in the New Fact Sheet The Existing Formula The bunker charge for a given month is based on a weighted average of weekly fuel prices during the one-month period ending 30 days prior to the effective date. This allows for adequate notification of scheduled adjustments to the market. As an example, a scheduled adjustment of the charge to take effect on May 1 is based on a averaging of fuel prices over the month of March. Weekly prices for a two-month period are provided so that users over time will be able to forecast the coming adjustment and verify the current one during a given month. Also posted at right is a Fuel Price-Bunker Charge Conversion Table for use in determining upcoming adjustments. By 1) Averaging the weekly fuel price totals to date; and 2) applying that average to the conversion table, users can easily get a sense of price trends and likely charge adjustments for the next month. A fully complete, accurate calculation of the next adjusted charge requires averaging of prices across all 4 weeks. More detailed instructions for tracking world marine fuel prices, and a description of how listed prices are weighted and averaged for purposes of calculating charge levels, are available in the full Bunker Charge Fact Sheet found elsewhere in this section.
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