Price Assessment

Platts Bunker Charges

  • About Platts Bunker Charges
  • Why are we used in contracts?
  • How does Platts assess the Platts Bunker Charges?

About Platts Bunker Charges

The Platts Bunker Charges, or PBCs, are independent daily indexes providing the container market with better tools for managing exposure to volatility in bunker prices and container freight. PBCs act as a replacement for the current Bunker Adjustment Factor (BAF) system, along with any other Low Sulphur Surcharge (LSS) and Marine Fuel Recovery (MFR) mechanisms. They are an independent and fully transparent benchmark, which levels the playing field for shippers, carriers and logistics providers when it comes to negotiating bunker charges in container freight.

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Related price assessments:

Platts Trans-Pacific Container Rates >

Platts Asia-to-Europe Container Rates >

Why are we used in contracts?

The biggest problem with the current bunker adjustment factor (BAF) methodologies is a near-complete lack of standardization and transparency in the underlying formulas. Shippers and logistics companies, therefore, face a multitude of indications and formulas, with quotes for the same routes sometimes being vastly different. As a result of those factors, negotiations have been frustrating, often leading to strained relationships. In contrast to BAFs, the daily Platts Bunker Charges allow industry players to easily factor fuel costs into freight contracts while protecting themselves from adverse bunker price movements.

How does Platts assess the Platts Bunker Charges?

Platts factors in a range of variables including relevant bunkering ports, loading and discharge ports, vessel speed, vessel size, fuel consumption weighted by fuel type and distance steamed in emissions controlled areas in calculating the Platts Bunker Charges. These assessments are regularly updated to reflect market practice and new regulations.


Methodology and Specifications

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