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LONDON: Drewry Maritime Research says the drop in bunker oil price to its lowest level in the past five years is likely to benefit ocean shippers rather than operators due to continued competition and over-capacity.

The latest example of the latter is the MSC Oscar (right) - at 19,224 TEUs it will be the largest box ship in the world when it comes into service next month.

Drewry argues that the continued fall in oil and bunker prices should not automatically lead to an increase in carrier profits because the operators only recover half of the Bunker Adjustment Factor (BAF) surcharges passed on to shippers, due to oversupply and trade imbalances.

MSC OscarHowever, it adds, if bunker fuel prices remain constant at their current prices throughout 2015, Drewry thinks the "potential fuel savings for carriers are considerable".

Analyzing the Asia-North Europe trade route, " home of the new breed of Ultra Large Container Vessels (ULCVs)", and assuming an average intermediate fuel oil price of US$370.00 and a marine gas oil charge of $683.00 on a round trip of 77 days, Drewry calculates the estimated annual saving for a single 18,000 TEU vessel would be US$5.7 million compared to the same trip in 2014.

"For a single 12,000 TEU ship - the average size currently used in the trade - the estimated saving is US$4.75m. Therefore, the total annual fuel saving for a single service using 11 ships of 18,000 TEU would come in at around US$68.8m. These calculations do not take into account the introduction of new IMO sulphur limits from the start of next year," it adds.

If lower oil prices persist, the research company thinks all carriers will benefit, no matter how big their ships, as long as they're not tempted to lift freight rates as shipper demand grows. Drewry thinks "this sentiment played a part in carriers having to backtrack from recent US West Coast port congestion surcharges".

Noting that ocean carriers can still make money with or without full BAF recovery, the company cautions against giving away or not passing on the full surcharge to retain or obtain business in case the current fall in fuel prices turns out to be short-lived.

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