Isle of Man Steam Packet Company Confirms Freight Fuel Surcharge Following Significant Rise in Marine Fuel Costs

The Isle of Man Steam Packet Company informed customers on 25th of September of an effective increase of between 5% and 18%* to overall freight rates as a result of fuel surcharge calculations. Having held the fuel surcharge at Q2 rates through Q3 as an exceptional measure agreed with the Department of Infrastructure, the Company returned to the standard fuel-surcharge mechanism from 1 October, 2026. 

The fuel surcharge mechanism provides for limited cost recovery beyond the committed net fuel cost within the SSA, which currently amounts to £4.2m and does not generate any profit for the Company. It is based solely on fuel cost inputs and does not take into account any other operating costs of the Company.  

Commenting on the fuel surcharge increase Managing Director Brian Thomson stated:

“The revised surcharge has been agreed with the Department of Infrastructure and reflects exceptional increases in the cost of Marine Gas Oil (MGO), the fuel used by the Company's fleet.  

“We recognise that any increase in fuel surcharges is disappointing for customers and businesses, particularly at a time when many continue to face wider financial pressures. This is not a decision taken lightly, but one driven by continued volatility in global fuel prices. 

“Fuel represents a significant and highly variable operating cost that sits outside the Company’s control. The fuel surcharge mechanism exists to transparently recover exceptional movements in fuel costs rather than build those costs permanently into freight rates. We continue to absorb many other operating cost pressures, but the scale of the fuel price increases means full absorption would not be sustainable.

“As the island’s lifeline ferry operator, our priority remains maintaining reliable freight services that support businesses, supply chains and communities across the Isle of Man.”

Global Impact of the Closing of the Straits of Hormuz

The Isle of Man Steam Packet Company has absorbed an additional £4m net fuel cost during the year to date and fully expects to incur further losses despite the increase in this quarter’s surcharge, as a result of the ongoing closure of the Straits of Hormuz.

Importantly, the Sea Services Agreement ensures a minimum sailing schedule for the Isle of Man, with the Company committed to maintaining this essential connectivity. Consequently, there are limited options to reduce fuel consumption and therefore costs.

The Isle of Man Steam Packet Company is committed to delivering all of its obligations under the Sea Services Agreement, including applying the agreed fuel surcharge mechanism transparently and in line with prevailing market conditions.