When is the "surcharge" coming?

[ticketsunlimited]

The way things are headed right now It may be just of matter of days before the dreaded "fuel surcharge"

rears its ugly head.  I cant imagine with what the cruise industry has been through financially that they

don"t whack us with it soon.  Hopefully I am wrong but something has to give.

[firefly333]

Last time when the surcharge was peaking, oil was closing in on 150 a barrel. Oil is forecast for 110 pr 120 by late this spring .. so it might come up though right now with covid testing etc .. they might not be as quick to add it on. ..I dont expect it real soon but I do think they will,be thinking of it soon. Or raising prices.

[crewsweeper]

Not sure if it will ever be imposed.  I can't specifically recall any cruise lines ever imposing it or if so quickly rescinded.  But yes every time oil has breeched $100 a barrel, posters here revive the potential imposition.

[orville99]

IIRC, the fuel surcharge can only be imposed (at least for U.S. home ported ships) after a 60 or 90 day notification period. Don't remember the exact number of days, unfortunately.

[firefly333]

7 minutes ago, crewsweeper said:

Not sure if it will ever be imposed.  I can't specifically recall any cruise lines ever imposing it or if so quickly rescinded.  But yes every time oil has breeched $100 a barrel, posters here revive the potential imposition.

I remember it very well. They added it after people booked and got sued. They didnt have it in the contract when you booked but now it's there and you agree to having it added when you book. 

 

It was added in small amounts and went up as oil went up. I paid it more than once, not sure about you. 

[nelblu]

If it comes to fruition, will it be on any new bookings.  Wasn't this one of the reason for the lawsuit and subsequently being rescinded.

[tkportersat]

10 minutes ago, firefly333 said:

I remember it very well. They added it after people booked and got sued. They didnt have it in the contract when you booked but now it's there and you agree to having it added when you book. 

 

It was added in small amounts and went up as oil went up. I paid it more than once, not sure about you. 

Yep, I remember a few cruises with it back in the day...

[grandgeezer]

24 minutes ago, orville99 said:

IIRC, the fuel surcharge can only be imposed (at least for U.S. home ported ships) after a 60 or 90 day notification period. Don't remember the exact number of days, unfortunately.

According to what I could find on line, Celebrity will give a minimum of 20 days notice and it is applicable to booked cruises and within final payment.

The last time this popped up, the lines were making money, that isn’t the case now. It shows oil is $105 a barrel now, with a trigger for the surcharge at $65. I don’t think they’ll wait as long as last time.

[DukeASUGirl]

40 minutes ago, crewsweeper said:

Not sure if it will ever be imposed.  I can't specifically recall any cruise lines ever imposing it or if so quickly rescinded.  But yes every time oil has breeched $100 a barrel, posters here revive the potential imposition.

 

We have paid fuel surcharge in the past on NCL. Definitely 2007 to Alaska, but possibly 2005 to Western Caribbean and 2009 to Bahamas as well.

[firefly333]

41 minutes ago, nelblu said:

If it comes to fruition, will it be on any new bookings.  Wasn't this one of the reason for the lawsuit and subsequently being rescinded.

You already agreed now it could be added to any bookings. It would be nice if it was only new bookings, but they can add it to your already booked cruises. Again..yes it was the reason for the lawsuit ... it wasnt in the terms you agreed to ... now it is there.

[davekathy]

Shhh...

[crewsweeper]

3 hours ago, DukeASUGirl said:

 

We have paid fuel surcharge in the past on NCL. Definitely 2007 to Alaska, but possibly 2005 to Western Caribbean and 2009 to Bahamas as well.

OK  Don't recall a fuel surcharge in 2009 when I started cruising, or since.  In 2005 oil was around $65 per barrel., but had shot up from the $30s and $40s.  Didn't get above $90 until late in 2008. Oil between 2009 and 2014 was close to range it is now and even over $100 per barrel and there was no surcharges levied.

Edited February 24, 2022 by crewsweeper

[DukeASUGirl]

Husband says we paid it at least twice, possibly 3 times. He doesn't recall whether it was 2004 and 2006 (I misremembered the years of those cruises), or if it was 2006 and 2009. 

[grandgeezer]

1 hour ago, crewsweeper said:

OK  Don't recall a fuel surcharge in 2009 when I started cruising, or since.  In 2005 oil was around $65 per barrel., but had shot up from the $30s and $40s.  Didn't get above $90 until late in 2008. Oil between 2009 and 2014 was close to range it is now and even over $100 per barrel and there was no surcharges levied.

The big difference was that the cruise lines were making money then so it wasn’t a make it or break it deal. Now the cruise lines are billions of dollars in debt, not all their ships are sailing, and the ones that are aren’t sailing at no way near capacity. 
If things don’t change soon, if the surcharge isn’t implemented soon, their executive board isn’t doing the job they are getting millions of dollars to do.

[DirtyDawg]

Chill fellow cruisers.

Royal doesn't pay for fuel when they pull up to the pumps like we do. They hedge their fuel costs with Swaps, Forward contracts etc. So most of their fuel costs are likely already fixed for 2022. Short term volatility in oil prices does not affect their costs in the short term. If prices go to $120 or $140, and stay there for awhile,  2023 fuel costs would ne affected. So surcharges might come then. 

Of course, the cruise lines might try to plead poverty and impose fuel surcharges early. 😉

 

Frankly, I'd be more worried about a shrimp surcharge or a steak surcharge or a booze surcharge. 🤯

https://www.theguardian.com/business/2022/feb/16/off-the-charts-inflation-will-force-beer-prices-to-go-up-heineken-warns

 

Edited February 24, 2022 by DirtyDawg

[topnole]

2 hours ago, DirtyDawg said:

Chill fellow cruisers.

Royal doesn't pay for fuel when they pull up to the pumps like we do. They hedge their fuel costs with Swaps, Forward contracts etc. So most of their fuel costs are likely already fixed for 2022. Short term volatility in oil prices does not affect their costs in the short term. If prices go to $120 or $140, and stay there for awhile,  2023 fuel costs would ne affected. So surcharges might come then. 

Of course, the cruise lines might try to plead poverty and impose fuel surcharges early. 😉

 

Frankly, I'd be more worried about a shrimp surcharge or a steak surcharge or a booze surcharge. 🤯

https://www.theguardian.com/business/2022/feb/16/off-the-charts-inflation-will-force-beer-prices-to-go-up-heineken-warns

 

Similar to what many airlines did and/or do.  Southwest had a big advantage over rivals on fuel costs several years back because of their futures contracts.  

[CPT Trips]

4 hours ago, DirtyDawg said:

Chill fellow cruisers.

Royal doesn't pay for fuel when they pull up to the pumps like we do. They hedge their fuel costs with Swaps, Forward contracts etc. So most of their fuel costs are likely already fixed for 2022. Short term volatility in oil prices does not affect their costs in the short term. If prices go to $120 or $140, and stay there for awhile,  2023 fuel costs would ne affected. So surcharges might come then. 

Of course, the cruise lines might try to plead poverty and impose fuel surcharges early. 😉

 

Frankly, I'd be more worried about a shrimp surcharge or a steak surcharge or a booze surcharge. 🤯

https://www.theguardian.com/business/2022/feb/16/off-the-charts-inflation-will-force-beer-prices-to-go-up-heineken-warns

 

Hmm . . . Menu excerpt

[neverbeenhere]

Has Royal had the cash/assets necessary to be hedging fuel prices to sustain this price hike? 

I don’t know. 

[RKHOOKER]

Won’t happen while Cruise With Confidence is applicable. 

[topnole]

9 hours ago, neverbeenhere said:

Has Royal had the cash/assets necessary to be hedging fuel prices to sustain this price hike? 

I don’t know. 

Or the opposite.  Could they afford not to do it when oil was so cheap?   It isn’t like they paid for fuel ahead of time.  Just a very small % to lock in guaranteed future rates.   
 

 

[SRF]

9 hours ago, neverbeenhere said:

Has Royal had the cash/assets necessary to be hedging fuel prices to sustain this price hike? 

I don’t know. 

 

2022 fuel contract was probably negotiated 5 years ago.

[crewsweeper]

1 hour ago, topnole said:

Or the opposite.  Could they afford not to do it when oil was so cheap?   It isn’t like they paid for fuel ahead of time.  Just a very small % to lock in guaranteed future rates.   
 

 

Daily Margin calls are only cash needed, if needed.  These things typically get locked in and hedged.

[Sunshine3601]

19 hours ago, davekathy said:

Shhh...

Exactly what I thought when I started reading this thread.🤪

[topnole]

15 hours ago, DirtyDawg said:

Chill fellow cruisers.

Royal doesn't pay for fuel when they pull up to the pumps like we do. They hedge their fuel costs with Swaps, Forward contracts etc. So most of their fuel costs are likely already fixed for 2022. Short term volatility in oil prices does not affect their costs in the short term. If prices go to $120 or $140, and stay there for awhile,  2023 fuel costs would ne affected. So surcharges might come then. 

Of course, the cruise lines might try to plead poverty and impose fuel surcharges early. 😉

 

Frankly, I'd be more worried about a shrimp surcharge or a steak surcharge or a booze surcharge. 🤯

https://www.theguardian.com/business/2022/feb/16/off-the-charts-inflation-will-force-beer-prices-to-go-up-heineken-warns

 

Remember that year when there was the lime shortage?  One cruise we were on they had no lines from day 1.   They were putting lemons in corona beer on the ship.  Lol.  

[ONECRUISER]

22 hours ago, firefly333 said:

I remember it very well. They added it after people booked and got sued. They didnt have it in the contract when you booked but now it's there and you agree to having it added when you book. 

 

It was added in small amounts and went up as oil went up. I paid it more than once, not sure about you. 

Same here, I remember seeing it on mine. Dont see it mentioned again unless large Spike like $145-150 a Barrel like in past