Greg Knowler

Prices have more than doubled since the war started, and with fuel comprising almost 30% of operating expenses, the Hong Kong-based carrier has been forced to reduce capacity.

Ocean carriers say there is still enough bunker fuel availability in general, but the different fuel types are unevenly distributed and affecting key refueling hubs in Asia, notably Singapore.

Decisions that before the conflict would have taken months are now being decided in days, speeding up road transits, freeing urgently needed capacity and easing customs procedures, industry executives told a webinar.

Transport unions have mobilized members in Ireland, the UK, France, Germany and Italy with the average price of diesel in the EU up 33% since the start of the war in the Middle East.

Global cargo capacity has largely recovered to pre-shock levels, while international routes have yet to be seriously affected by jet fuel shortages, according to Xeneta.

The 14-day lead time now in place at Asian hubs would become a “global standard” for vessels seeking bunker fuel should the key waterway remain closed for another month, says S&P Global's Fotios Katsoulas.

But the carrier's ability to continue that cost recovery will depend on the long-term impact of high energy prices on consumer demand and how the industry manages its fast-growing order book, Vincent Clerc says.

The carrier's first-quarter financials, which included a sharp drop in net profit, were generated in a market roiled by ongoing tensions in the Middle East, rising oil prices and increasing operating costs.

Costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly BAFs.

Spot rates on the corridor hit their highest level of the year in the first half of May, but there are mixed views on whether demand will continue into the summer.