Lower oil prices are sharply reducing the cost of shipping merchandise from Asia to the United States and Europe as the cost of bunker fuel tumbles. Container shipping companies deal with the volatility in fuel prices by adding a separate bunker adjustment factor or fuel surcharge to their freight rates. Fuel can account for more than 60 percent of the total operating costs of moving freight across the oceans so the surcharges are one of the most important elements of total transportation costs. Surcharges are recalculated quarterly based on the average cost of fuel over a previous 13-week period. So the charge for April-June 2015 is based on fuel costs between December 2014 and February 2015. Other adjustments are made periodically to reflect changes in average fuel consumption, sailing time, vessel capacity and fuel quality changes. In September 2008, shortly after oil prices had peaked, shipping […]