EUROPE/USA TRADE - DEREGULATION AND NEW BAF ARRANGEMENTS

As you may be aware the conference structure is in the process of being disbanded within the European Unionand as a result the commonality amongst pricing structures and surcharges between conference lines is due to disappear. This inevitably leads to a much wider range of charge items being quoted in the market. OOCL has a very strict policy to ensure legal compliance within each country where we operate, so we have developed our own independent Pricing and Surcharge structure based on our own costs and operational requirements.

The fact that the existing conference structure is disbanded means that those individual carriers who choose to charge a fuel adjustment need their own independent method of calculating the charge. Taking this opportunity, OOCL has constructed its own BAF formula to more realistically reflect the current market conditions with regards to this charge. This has lead us to re-assess the pricing structure with regard to the fixed fuel element comprised in the ocean levels.

Attached you will find answers to most of the questions you may have in this respect; the appendix gives you an illustration of BAF levels when bunker prices fluctuate.

BAF levels for June 2008 are : $279/TEU for East Coast/Gulf ports and $417/TEU for US West Coast ports.
Low sulphur fuel surcharge will continue to be applied.
As in the past we will send you monthly BAF updates.