Thursday, February 2, 2012

Container Shipping Giant Imposes Swingeing Surcharges on Asia Europe Freight Rates

CMA CGM Move to Stem the Flow of Blood
Shipping News Feature

FRANCE – ASIA – EUROPE – In a bid to steady the current trend of downward spiralling freight rates (see previous story) French container shipping giant CMA CGM has announced ‘Rate Restoration’ measures which will come into force from the beginning of March. A company statement says:

“In 2011, the unprecedented decrease of Freight rates coupled with the sharp increase of bunkers and with the deterioration of operational conditions in Asia has severely impacted the results of all carriers operating on the Asia to Europe Trade. The tendency to quote ‘All in’ rates including surcharges such as BAF, CAF, Aden Gulf surcharge, Suez Surcharge, CSF has left carriers without any proper coverage of these costs.

“Besides, the adverse weather conditions (the 6 main ports of Central and North China have been closed 7955 hours / 331 days in 2011 because of extreme weather conditions) and the decrease of productivity in some Asian Ports due to an emerging congestion have forced carriers to speed up vessels on the westbound leg to meet berthing windows in Europe and Suez Canal convoys. Because of Transit time and schedule reliability constraints, bunker consumption has increased at the worst moment offsetting completely the benefits of slow steaming on the eastbound leg.”

The result of these problems has meant that CMA CGM will introduce increases from the 1st March 2012 on the Asia to Europe/Mediterranean trade amounting to $200 per TEU and an interim fuel surcharge of $550 per TEU, this latter charge to vary proportionally to the CMA CGM bunker adjustment factor, up or down , on a monthly basis. The charges will start from the chosen date for cargo which is on board the company’s vessels, presumably meaning that freight forward cargo could be subject to the charges even if loaded aboard in February.

The increases will apply as follows:

• Origin Range: From All Asian ports (including Japan, South East Asia, Colombo and Bangladesh)

• Destination range: To all Northern European ports (including UK and the full range from Portugal to Russia), to West Med, Adriatic, East Med, Black Sea and North Africa.

• Cargo: Dry cargo, Out of Gauge cargo, Paying empties, Break-bulk and Reefer cargo.