Ocean carriers impose emergency fuel surcharges as bunker costs surge

Ocean carriers are introducing emergency fuel surcharges and raising freight rates across key global trade lanes as rising bunker fuel costs and geopolitical tensions disrupt shipping services, with Indian rice exports to the Middle East facing delays, higher logistics costs and container shortages, market sources told Platts March 10.

The additional charges and service disruptions are increasing freight costs for exporters and buyers, restricting container availability and forcing some rice exporters to reroute cargo, renegotiate contracts or temporarily halt shipments to key Middle Eastern markets.

Platts assessed PCR 33 -- West Coast of India to the Middle East -- at $3,400/FEU, up 1,136% from March 2, and TCR 33 -- West Coast of India to the Middle East -- at $2,200/TEU, up 1,000% over the same period.

At present, the Strait of Hormuz is effectively off-limits for shipping. We have a shipment scheduled for Umm Qasr, but securing freight has become impossible," said Ashish Narain, Managing Director at Innoterra. "As a result, we are exploring alternative routes, such as through Mersin port. Freight rates have risen to around $2,500 per container, and services to several Persian Gulf ports have been disrupted."

Narain added that Innoterra is converting contracts to FOB terms to shift freight responsibility to buyers while exploring alternative port options.

Market participants said container availability has also tightened as disruptions affect the circulation of equipment.

"Shipping lines constantly recirculate empty containers, but when disruptions occur, container circulation is affected, and availability becomes a major issue," said Dev Garg, vice president of the Indian Rice Exporters Federation.

"India exports around 3.2 million mt of basmati rice to the Middle East annually, even if buyers are willing to pay higher freight rates, containers are simply not available," Garg said.

"There is also significant uncertainty, and many insurers are reluctant to cover shipments in the region. Bunker fuel prices have nearly doubled... cargo is currently stuck at Jebel Ali port," Garg added.

Amid the disruptions, carriers have begun introducing additional fuel surcharges to offset rising bunker costs.

On March 9, Hapag-Lloyd notified that an Emergency Fuel Surcharge (EFS) will apply to all trades, covering costs not included in the Marine Fuel Recovery Charge (MFR). Rates are: long-haul front haul—$160/TEU (dry), $225/TEU (reefer); longer haul back haul—$70/TEU (dry), $100/TEU (reefer); intra-region—$70/TEU (dry), $100/TEU (reefer). The EFS applies to bookings made on or after March 23, 2026, and is payable by the Sea Freight payer.

Carriers are introducing higher freight rates globally. CMA CGM has announced a Peak Season Surcharge (PSS) of $400/TEU for Northeast Asia and Southeast Asia to Kenya, Tanzania & Mozambique from March 8, 2026, until further notice.

"Marine fuel charges will be implemented globally across all trade lanes above war surcharges," a Malaysian shipper said.

As marine fuel charges are being introduced, market participants are reporting services getting cancelled from West Coast India to the Middle East amid shippers' reluctance to send cargo to the region.

An African shipper added, "MSC will introduce an Emergency Fuel Surcharge (EFS) effective March 11, in addition to existing war surcharges from India, Pakistan, and Bangladesh—set at $100/TEU to South Africa, $120/TEU to East Africa, and $180/TEU to West Africa."

"Our India to Khorfakkan service is getting cancelled until further notice amid high marine fuel charges; there are no freight rates for this trade lane as of now," said an Indian carrier.

"Fuel surcharges will be added on top of war surcharges, resulting in a final cost that is unimaginable. At present, shippers are not sending any cargo," added an Indian shipper.

Traders said the disruptions have also created cargo backlogs in regional hubs and uncertainty among buyers.

"Suppliers are quite cautious at the moment. Before Gulfood, a large volume of cargo was moving to Dubai, which has now resulted in an oversupply situation there," said Karan Prem Lohana, a rice trader at Jatlee Commodities DMCC. "A lot of cargo destined for Iran, Iraq and Afghanistan is currently stuck... some Indian shipments heading to the Middle East are also facing issues with buyers refusing cargo."

Traders said the disruption has led to cargo accumulation in regional hubs while buyers reassess delivery timelines and logistics risks.

"The increased costs are being absorbed by buyers, making it costlier for them, and we're seeing a shift towards breakbulk shipments," a trader from India said.

"There are some disruptions for even the African trade, but much less than the Middle East route. However, I feel that white rice exporters definitely see more opportunity in West Africa. But buyers are still uncertain about how the situation will evolve in the coming days," a rice trader from West Africa said.

Platts assessed India 1121 Steam Basmati Rice 2% Broken at $994/mt FOB FCL March 6, $41/mt down on the week.