Date:22/05/2006 URL: http://www.thehindubusinessline.com/2006/05/22/stories/2006052200930602.htm

Back No oil wave

Unlike most shipowners apprehensive of the probable impact of the rising crude oil prices and the consequent jump in bunkering cost, the Chinese carriers are little worried about it, according to Shipping Gazette. Their estimates suggest that a 10 per cent rise in fuel cost should not cause more than 2-3per cent rise in freight charges.

This is because, as it is explained, it is possible for the shipping companies now to control fuel costs through several measures such as buying in bulk, taking recourse to fuel futures trading, upgrading technology to keep fuel consumption at a minimum and raising operational efficiency in addition to following the traditional route of applying the bunker adjustment factor.

Also, most carriers make provision against the probable rise in fuel cost and experiences show that the impact of any hike in fuel cost is more on other transport and logistics companies than on the shipping companies.

Our Bureau