Stage set for a showdown between shippers and carriers over surcharges

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The stage has been set for a showdown between ocean carriers and forwarders and shippers following the flurry of surcharges and rate increases sought by container lines across most of the major trades in June and July.Stung in the first quarter by those higher costs and weak spot freight rates, carriers are seeking to levy emergency bunker surcharges (EBS), peak season surcharges (PSS), operations cost recovery (OCR), bunker adjustment factors, currency adjustment factors, freight all kinds (FAK) increases, and general rate increases (GRIs). When their losses become too high, carriers tend to act; what’s unclear is whether that point has been reached, reports IHS Media.Several carriers are charging an EBS that ranges from US$55 to $60 per TEU from June 1 on most trades and from July 1 on US routes, although a Hapag-Lloyd customer notice said an EBS of $265 per TEU will be charged on North Europe-US West Coast routes.Hapag-Lloyd last week announced an EBS of $1 per TEU that it said was incorrect and replaced it with an OCR surcharge of $55 per TEU. The Hamburg-based line said the surcharge was necessary because of a “consistently high increase of operational costs in 2018” and it will be implemented by June 15 on all trades related to China exports or to the US Shipping Act. The OCR on those trades will come into effect on July 1.The peak container shipping season for the Asia-Europe trade is approaching in July and shippers are receiving surcharge advisories as carriers try to capitalise on expected volume increases and improve their battered bottom lines.Hapag-Lloyd informed the market of a PSS of $55 per TEU that the ocean carrier said will be levied from June 1 on all trades out of China. CMA CGM postponed its May 15 Asia-US peak surcharge and will now be charging $600 per FEU from July 1. Maersk Line began imposing an emergency PSS of $120 per FEU on all trades out of China from June 1 and will add the United States and Puerto Rico from July 1. The emergency PSS is on top of the peak season surcharges already being charged on routes such as Shanghai-Algeciras ($60 per TEU).Yang Ming Line is hoping for a $1,000 increase per FEU on the Asia-US trades from July 1 that would take spot rate levels on both the US East Coast and US West Coast to levels not seen in years. CMA CGM began charging Asia-N

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