Fuel Surcharge Format Change – Central Alaska [ANCHORAGE – Posted on 03.15.2016]

In May of 2013 Totem Ocean Trailer Express made the decision to reduce the impact of the Fuel Surcharge (FSC) in the overall cost of transportation by cutting the surcharge in half and increasing the base rates to offset the decreased FSC. The overall effect on total transportation charges would be zero. One of the purposes of the change was to make the base rate much closer to the total amount actually paid. At that time, Horizon Lines decided to maintain the path they had taken over the previous 40 years and keep the base rates and FSC consistent with how they had traditionally been calculated. Since Span Alaska used Horizon Lines primarily at that time we continued to follow Horizon with their pricing methodology.

Today, the new owner of what was Horizon Lines, Matson Navigation Company, has decided to follow a model that TOTEM Maritime is using and lower the FSC and adjust the base rate accordingly. Matson’s notice is attached. Also attached is an example that demonstrates this conversion, which will not affect the overall charges our customers will pay on any given shipment.

Since both carriers are following this pricing format, Span Alaska will have no justification to keep our FSC and base rate policy as it is today. We feel it is important to follow Matson’s adjustment and charge our customers exactly as we are charged on FSC. This change is scheduled to take place on April 18TH, 2016. Our pricing team will be preparing and distributing new pricing sheets for distribution to all of our customers. Obviously, we welcome your calls and questions about this change should you have them. We understand that this is a change in methodology but the overall cost of shipping cargo to Alaska will not change.

Thank you for your continued support.

Tom Souply

President and CEO

Format Change Example
Current Charge
Ocean charge: $100.00
FSC(22%): $22.00
Total Charge: $122.00

Format Change
Ocean charge (9.9%*): $109.90
FSC(11%): $12.09
Total Charge: $121.99

*(122/111=1.099) Or 9.9%

Matson Notice of FSC Format Change