Fuel costs were fatal to The Containership Company: Lars Jensen
THE collapse of The Containership Company (TCC) was attributed to unrecovered fuel costs, by former company director Lars Jensen, who now heads his own consultancy, SeaIntel Maritime Analysis.
The budget carrier was "always out of pocket on fuel costs" as the company had come under market pressure to implement the same eastbound fuel surcharge as Transpacific Stabilisation Agreement members did.

Seemingly, the start-up was out of its depth as "TCC's 3,000-TEU vessels compared badly with TSA members' 5,920-TEUers, reported London's Containerisation International. "The TSA's bunker surcharge formula provides its members with a competitive advantage compared to non-TSA carriers. This is unlikely to be a stated objective of TSA, however, it is nonetheless the consequence," said Mr Jensen's newsletter.

"If a new non-TSA carrier was to launch a service with the same size vessels as TSA members, this competitive advantage would cease to exist. Smaller carriers of course have the competitive freedom to introduce their own BAF formula, however, in practical terms, this is likely not possible," he said.

The report highlighted that SeaIntel calculates the TSA's eastbound transpacific bunker surcharge of US$468 per FEU for sea freight transported to the US west coast, introduced in April, ought to be $29/FEU higher to pay for additional fuel costs. It is also far lower than the Westbound Stabilisation Agreement's BAF of $635/FEU which came into effect on the same date.

By way of comparison, the report also noted that bunker fuel costs have soared since the end of last year to more than $600 per tonne.