Florida attorney general reviewing cruise fuel surcharge

[msblackjack]

The Florida Attorney General is reviewing the cruise fuel surcharges imposed by Carnival and Royal Carribbean;
the link to a local news article is here: http://www.heraldtribune.com/article.../APN/802050727

[richstacy]

Sounds a bit like grandstanding on the part of the AG. The fuel charges are minimal and governed by market forces.

[msblackjack]

Originally Posted by richstacy

Sounds a bit like grandstanding on the part of the AG. The fuel charges are minimal and governed by market forces.

I agree but the cruise lines made a deal that they would not tack on any other charges over their brochure rate other than the port fees and taxes. but there is some sort of loop hole that would allow them to take on other fees, so long as they did in with advance notice, dotted i's and crossed t's they will probably be okay. (which it appears that they did it the right way). I think they should probably just include the new fuel rate in their basic price, raise there rates to cover it, as it is very understandable with the rising costs of fuel and go with that and not have a tack on fee. I don't think the escalating fuel costs are temporary, unfortunately.

[richstacy]

"I don't think the escalating fuel costs are temporary, unfortunately."

That is for certain. They will fluctuate a bit from time to time, but the trend will be ever up. Gas prices and fuel prices are driven up by rising demand caused by prosperity and increased use of motor vehicles in China and India. There is nothing we can do about it, and we will be paying $10 a gallon by 2020.

[mehawk]

The surcharges are here to stay such as they are with the airlines.

[Kevinexile]

Originally Posted by msblackjack

I agree but the cruise lines made a deal that they would not tack on any other charges over their brochure rate other than the port fees and taxes. but there is some sort of loop hole that would allow them to take on other fees, so long as they did in with advance notice, dotted i's and crossed t's they will probably be okay. (which it appears that they did it the right way). I think they should probably just include the new fuel rate in their basic price, raise there rates to cover it, as it is very understandable with the rising costs of fuel and go with that and not have a tack on fee. I don't think the escalating fuel costs are temporary, unfortunately.

You know I am working on planing my first cruise for my wife and I. To be honest I think I know why this is being looked at. Looking at the stuff I got from Royal Caribbean in the mail today the AG may have a case. It tells you there could be taxs and surcharges added but only taxs and surgarges from goverment and quasi-goverment agency's otherwise based on the information in my hand from Royal Caribbean it would seem they can't add a fuel surcharge.

Now don't get me wrong I know company's have to make money I have no problem with that. But the right way to do this is to just raise the cost of the tickets. I know from reviewing this stuff with my wife so far one question keeps coming up and that would be "Is there any other unexpected charges." My problem with surcharges. This goes for the airlines as well is if they add this and get away with it what is to stop them from adding something else at the last minute. It just leads to confusion for new cruisers in my opinion.

[Anne Campbell]

Instead of adding the price of fuel to the cruise fare (it's a cost of doing business, after all), they have made it a surcharge for one reason: they don't want to pay travel agent commissions on the amount. Port charges, government fees and taxes are also "non commissionable charges".

[richstacy]

As for me, I recognize that the cost of fuel is going up and will continue to do so because of forces completely beyond anyone's control. (outlined in my previous post) I know this will raise the cost of virtually everything indirectly, but will directly raise the cost of of driving my car, flying or cruising and I expect that. How the cruise line chooses to charge it makes no difference to me, I expect to have to pay it. So should you.

[Aidan]

Originally Posted by richstacy

Sounds a bit like grandstanding on the part of the AG. The fuel charges are minimal and governed by market forces.

Wow, I'm not so sure, Rich. It seems to me it depends on the contractual obligations of who has to eat the fuel increase ( and the cruise line may or may not be covered here .... I don't know), but the size of the increase is irrelevant.

What if the increase was $1,000, governed by market forces?

In the current economy, this is a case of "what it costs might not really be what it costs in the end ... sorry, consumerl".

Cheers, Aidan

[richstacy]

Well Aidan, IMHO, if the increase was $1,000 and the cruise line had 10 ships with, 1,500 boardings a week, for 52 weeks that would amount to $1.5 million dollars a week or 78 million dollars a year. If they were in tight competition with other lines, and profit margins were slim, I guess they might have to decide whether to try to pass thee cost on to passengers, or declare bankruptcy and go out of business.

The point is that in a market economy like ours, the consumer always gets stuck with the increased cost of commodities like fuel, or steel, or labor, or food or anything else you want to name. The business (if it wants to stay in business) whether it is Princess, McDonald's, or Sears, never "eats" the cost of such increases. We do -- invariably.

As to petroleum based fuels, the Chinese and Indians are adding millions of motor vehicles to the road every year. Thus demand is increasing year by year. Fuel costs will vary in the short term, but the overall trend will be up, up, up; until viable alternatives are developed.

State AGs who want to run for governor someday like to make big splashes in the press to curry favor with consumers, but that won't change the end result at all beyond the very short term.

By the way, a rational and long proven alternative to fuel oil for ship propulsion is nuclear power, if only we could get past irrational fear.

[Aidan]

Originally Posted by richstacy

The point is that in a market economy like ours, the consumer always gets stuck with the increased cost of commodities like fuel, or steel, or labor, or food or anything else you want to name.

Of course, but if I buy a ticket to a movie, I don't expect the usher to ask for an additional $2 for heating the theatre. If I buy groceries, I don't expect the bagger to demand an extra $5 for trucking the food. As I said, the cruise lines may contractually be covered, but it is still wrong IMO.

Nuclear ship propulsion is clean, safe, and proven, and also very, very, very expensive. What would a cruise on a nuclear ship cost? $20,000? $30,000. More?

Cheers, Aidan

[richstacy]

Re a nuclear cruise ship, I don't know, would it be that expensive? If so, why? Generation of nuclear power ashore is certainly competitive with fossil fuel.

I see your point, but actually in the store they are frequently going around and raising the prices while you are there shopping.

On your next cruise, if they decided to give you an unexpected discount, or say $100 unexpected shipboard credit will you turn it down Me neither.

[Kevinexile]

Originally Posted by richstacy

Re a nuclear cruise ship, I don't know, would it be that expensive? If so, why? Generation of nuclear power ashore is certainly competitive with fossil fuel.

I see your point, but actually in the store they are frequently going around and raising the prices while you are there shopping.

On your next cruise, if they decided to give you an unexpected discount, or say $100 unexpected shipboard credit will you turn it down Me neither.

I agree except for one thing. The store doesn't send you documentation telling you once you buy something they will not raise the price and the only thing that could change are goverment fees. But that is exactly what the RC documentation I recived stated.

The store also doesn't say. "I know you bought those cookies yesterday but the gas went up for our cookies so since you haven't opened your bag of cookies yet we are going to make you pay more even though you already bought it. That is what the cruise line and airlines are doing. In fairness a lot of shipping companies are doing this as well. But it doesn't make it right.

[Aidan]

Originally Posted by richstacy

Re a nuclear cruise ship, I don't know, would it be that expensive? If so, why? Generation of nuclear power ashore is certainly competitive with fossil fuel.

I was just guessing on the cost. There aren't any nuclear-powered cargo ships for a reason. Care to guess the reason? -- it isn't safety

On a serious note, a nuclear reactor on a ship is quite different than one one land, mostly concerning containment and cooling. It is a safe machine, but a tremedously complex machine, requiring tons of capital to build and dozens of highly-paid personel to maintain. Oil is just cheaper.

On a side note, my father was involved briefly with projects to build a nuclear-powered airplane (1950s) and a reactor in space (President Reagan's star wars program), both abandoned.

Cheers, Aidan

[richstacy]

There was a Nuclear powered commercial vessel in the 60s called the Savannah. It is currently on display in charleston Harbor. I'm sure expense is one of the reasons there are no more of them. Another is the same irrational fear that has prevented the siting of a single nuclear power plant anywhere in the U.S. since the early 70s. Meanwhile the French produce about 80% of their power through Nukes as do many other nations.

[mehawk]

If we had nuclear cruise ships, then we wouldn't need the whale tails...

[Rev22:17]

richstacy,

Originally Posted by You

Re a nuclear cruise ship, I don't know, would it be that expensive? If so, why? Generation of nuclear power ashore is certainly competitive with fossil fuel.

The short answer is yes, it would be that expensive. Have you noticed that all of the new cruise ships use either diesel-electric or turbo-electric propulsion systems rather than steam? A steam plant takes a LOT of space in a hull, and it would be less efficient than the current generation of generators and motors. It also would require a LOT more manning.

And a nuclear propulsion plant is even more costly, partly because the reactor plant is just a fancy way to make steam that requires more manpower, more safeguards, and more extensive maintenance and partly because there are very few shipyards in this world that have the facilities and the trained staffing that are needed to do work on them.

Norm.

[richstacy]

Yeah Norm, the buggy whip guys used to say similar things about cars too. Check out this link. There will come a point in the next decade or so when nuclear ships will be more economical than fossil fuel ships. Then it will be a matter of getting around the fear factor. I've know lots of guys who have served on Nuclear carriers and subs. None of them glow in the dark. Nuclear technology has come a very long way since Chernobyl and the Savannah. Not next year to be sure but by 2020. Who knows?

http://www.atomicengines.com/ships.html

[richstacy]

Incidentally, the NS Savannah is no longer a museum ship in Charleston, (where I toured her some years back) but is now in Norfolk VA.

http://en.wikipedia.org/wiki/NS_Savannah

[Salty Dog]

I'd have big problems sleeping if I knew there was a nucleor reactor under my cabin!!!

[richstacy]

That's just what they used to say about those infernal 'steam engines.' Probably just as well you are not in the navy then

[elfster]

Considering the soaring price of fuel, I really do not have a problem with the surcharge. And, IMO find it a modest increase.

[mehawk]

Originally Posted by elfster

Considering the soaring price of fuel, I really do not have a problem with the surcharge. And, IMO find it a modest increase.

Very true.