Nordic American Tankers says the market for its ships is exceptionally good and expects tanker rates to hold for at least another year or two. That call deserves your attention even if you never book a barrel of crude. Tanker earnings set the tone for bunker prices, vessel availability, and the surcharges that ride on your ocean freight invoice. NAT runs a single-class Suezmax fleet, the mid-size crude carriers doing the heavy lifting on West Africa, Mediterranean and US Gulf routes.
What Happened
In its summer message to shareholders, NAT described the market for its ships as exceptionally good and said it believes that strength runs for at least another year or two. The company drew a line between this cycle and earlier geopolitical shocks. It has seen geopolitical trouble before. What is different now, in its telling, is the scale of the disruption to the global energy picture.
We have seen geopolitical affairs in the past, but the magnitude of present events related to the global energy picture is unprecedented.
NAT also went after the forecasting business, aiming at the so-called experts and analysts who make a living from predictions. Read past the swipe and the substance is a plain market call from an owner with money on the water: rates are strong, and the people who own the ships do not expect them to break soon.
Impact on Freight Rates and Operations
Strong tanker earnings never appear on a container invoice as a line called tanker rates. They appear as fuel. Longer voyages and rerouted crude flows lift ton-mile demand, bunker demand tightens behind it, and carriers pass the cost through as BAF or an emergency fuel surcharge. If your ocean quote carries a floating fuel component, that is where a two-year tanker run lands on you.
There is a second effect on capacity and asset pricing. Owners earning well have no reason to discount, and yard slots get bid up by whichever segment is making money. Charter rates stay firm, secondhand values stay firm, and relief on the container and breakbulk side arrives slower than a normal cycle would give you. Plan on that, and treat any softening as upside rather than the base case.
What Shippers Should Do
- Get the fuel clause in writing. Ask your forwarder how BAF is calculated and how often it resets. A quarterly reset behaves very differently from a monthly one across two years of firm bunker prices.
- Contract on 18 to 24 months, not 12. If NAT's read holds, a one-year deal reprices straight into the strength. A longer term with a capped fuel escalator moves that risk off your books.
- Recheck LCL against FCL at today's numbers. Surcharges hit LCL per CBM and FCL per box, so the crossover point shifts every time fuel moves. Rerun the comparison before each quarter's bookings.
- Put the surcharge into landed cost today. If you quote customers a delivered price, a fuel surcharge you absorb quietly is margin you lose loudly at year end.
Key Takeaway
A tanker owner betting publicly on two more strong years is telling you to budget for higher fuel-linked surcharges through 2027 rather than wait for them to fade.
Plan Your Shipment: Use our free CBM Calculator, Chargeable Weight Calculator, and Container Load Calculator for your next shipment.
Source: Hellenic Shipping News