When a Bunker Is Not a Bunker…

Recently Matson has made some changes to their OBLs that have caused a considerable amount of confusion and uncertainty in the billing process. We have been working with Matson on the issue, and hope to have some changes made soon to resolve the confusion, but in the meantime we thought we should give an update on the problem.

Matson’s OBLs have always been a bit different in that that their Bunker Fuel Surcharge has always just been labeled “Fuel Related Surcharge.” Since this has been the only fuel related item on the OBL, it was clear that this was the Bunker charge, and we billed it as such.

Recently, Matson has been offering inland related services on some of their shipments, and this additional service offering caused a change to their OBL. When they bill for these services, they need to add on a fuel surcharge for the inland portion. Unfortunately they accomplished this by adding a “Bunker Fuel Surcharge” line item to the OBLs and including the inland fuel surcharge there.

The result of this is that on Matson OBLs, if there is a “Fuel Related Surcharge” item, it is actually a Bunker fuel surcharge; and if there is a “Bunker Fuel Surcharge”, it is actually the  fuel surcharge for the inland services. In short, they are actually listed exactly opposite of how they should be listed. In the invoice below, the bunker is actually the $81.91 charge, not the $43.67 charge.

As you can imagine, this has caused considerable problem in the billing process. When we first saw these OBLs we assumed that Matson was billing the Bunker under the Bunker Fuel Surcharge line item. After some questions from customers, we contacted Matson and learned that this was not the case, and the items were reversed. We have been working with Matson, and hope they will be able to make a change to their OBLs to correct this situation.

In the meantime, we are in a difficult situation. For now, we are continuing to bill the Bunker in the amount listed on the OBL as Bunker Fuel Surcharge, even though we know this is the incorrect amount. The reason is that we think it would be difficult to explain to the approving PPSOs thatthe bunker is really the fuel surcharge and the fuel surcharge is really the bunker. Basically, we would be asking them to disregard the documentation and “just trust us,” and we don’t believe that would be easy. Also, we have to think about GSA in this situation. If we bill in a way contrary to the documentation, we would be unable to defend these billings against a GSA post-audit Notice of Overcharge.

We have asked Matson to issue a statement (in addition to fixing the OBL), explaining that on their current OBLs, the bunker is not really the bunker, it is the fuel surcharge, and vice versa.  Once they do this, we can then go back and correct all the invoices we have billed previously, and make sure our customers get all the money due to them. Our hope is that a statement from Matson will help us explain to the PPSOs why we are billing the way we are, and also give us some protection against GSA in the future, although I am still very nervous about the possibility of overcharges on these items.

As we stated at the beginning, we have had numerous conversations with Matson about this situation, and we hope that we will soon see a change to their OBLs and a statement to help us clean up the previous invoices. Obviously the sooner we have these items, the less invoices we will have to clean up, which is better for all parties. We will keep you posted about our progress on this issue.

Related Posts

1. Matson Bunker Confusion Clarified - August 16th, 2010
2. Rebilling Bunker/Security/War Surcharges - March 8th, 2006
3. SDDC Message on Bunker Surcharge, War Risk, and Related Items - February 27th, 2006