2026 Top 100 Importers & Exporters Letter from the Editor

By Mark Szakonyi

Shippers and forwarders are trying to resist carrier attempts to calculate BAFs monthly, rather than quarterly.

The war in the Middle East has disrupted oil supplies and doubled bunker fuel prices in key hubs, complicating or slowing annual trans- Pacific service contract negotiations between container lines and US importers.

As shipowners scramble to secure fuel amid worsening scarcity, elevated energy costs are being passed to shippers through bunker adjustment factors( BAFs) and emergency bunker fuel surcharges, driving up container spot rates, with container lines offering few assurances on the limits of these higher costs.

Still, there is little concern that the increased attention on the fuel component of rates will derail finalizing 2026 – 27 service contracts, which typically go in effect May 1. The last time fuel, which is generally treated as a simple pass-through cost within contracts, complicated negotiations was in 2019, ahead of impending low-sulfur regulations.

The impact of the war has helped carriers secure higher rates than last year, even when fuel was excluded, two container line executives said, but increased costs from labor, port tariffs and landside transport make most of the contract rate gains a wash compared with last year. Unlike in past years, when negotiated contract rates slipped in early March, one of the carrier executives noted his pricing power increased as the impact of the war widened.

Container spot rates, as measured by various indexes, have been rising steadily since early March. Emergency fuel surcharges began taking effect in the first week of April, following a 30-day review by maritime regulators. The average cost to ship an FEU from Shanghai to Los Angeles hit $ 2,910 in the week ending April 9, a $ 719 increase from six weeks prior, before receding to $ 2,810 the following week, according to Drewry’ s World Container Index.

Container lines have imperfect means to recoup higher fuel costs and the additional costs accrued through disruption. BAFs can lag by up to 90 days, hampering carriers’ cash flow in the meantime. US maritime regulators have prevented carriers from immediately implementing emergency surcharges, forcing them to adhere to the 30-day notice period, as required by US shipping law.

The war has had minimal direct impact on container shipping, affecting just 1 % to 2 % of the total global capacity that typically transits the Strait of Hormuz. But the growing scarcity of bunker fuel in Asia has forced some ships to alter routings to refuel at alternative hubs, thus burning more fuel and accruing higher operating costs, a third carrier executive said.

The rejection by Chinese authorities of emergency bunker fuel surcharges has further complicated efforts by carriers to recoup higher costs from exporters in China. The severity of emergency surcharges varies by carrier, but all are easily in the hundreds of dollars to ship an FEU from Asia to the US West Coast.

US importers shipping contracted cargo can also be subject to emergency bunker fuel surcharges even if language within their contract restricts such fees. That is prompting discussions during contract negotiations about just how much exposure cargo owners face from future fees.

Shippers and forwarders are also trying to resist attempts by some carriers to calculate BAFs on a monthly, rather than quarterly, basis.

“ I can’ t mask my frustration about this. The fuel charge in the contract becomes nothing more than a glorified [ freight-all-kinds ] rate,” a forwarder told the Journal of Commerce.“ It nullifies our ability to get longer-term rates for purposes of stability and visibility.”

A fourth carrier executive explained that the BAF was a“ pre-war mechanism” that worked well when bunker fuel prices were relatively stable. But the recent surge in oil prices since March is adding literally millions of dollars a week to carriers’ costs.

“ When oil prices come back down— whenever that is— I don’ t think anyone thinks that the price [ of bunker fuel ] will stay like this,” the carrier source said.“ The rate will go back down to the pre-war rate.”

The second-quarter BAF shouldn’ t be too onerous for most shippers since it will mostly reflect the far less volatile January and February fuel prices, said Jason Cook, chief executive of Ardent Global Logistics. A sustained period of higher fuel prices through March and into the second quarter, however, will mean much higher BAF charges are coming in the third quarter.

Shippers may try to frontload third-quarter cargo throughout May and June to avoid paying the higher BAF, he said.

“ For the second quarter, the BAF should be pretty mild,” Cook said.“ It won’ t really show up until the third quarter.”

Senior editors Michael Angell and Bill Mongelluzzo contributed to this report.

email: mark. szakonyi @ spglobal. com

6 Journal of Commerce | May 4, 2026 www. joc. com