Tuesday, December 15, 2020

Freight Forwarders Fed Up with Excess Costs Passed on by Container Shipping Lines

Objections to What are Seen as Unjustified Surcharges
Shipping News Feature

UK – INDIA – WORLDWIDE – The news that a leading container shipping line is introducing an 'Emergency Space Surcharge' (ESS) on services from South East India ports to the North Continent, the Mediterranean, North Africa, Red Sea and Latin America, has shippers and freight forwarders incandescent with rage.

French box line CMA CGM announced details of the surcharge, to be levied from today ‘in a continued effort to provide customers with reliable and efficient service’, not at all however how the cargo community sees it.

This is by no means the first time such a charge has been introduced but shippers find it hard to extract an explanation which satisfies them, particularly in the middle of a pandemic when we have already witnessed extreme delays at ports like Felixstowe which is already costing them dear.

Complaints about other surcharges, detention and demurrages rates for stalled containers, often for reasons beyond the wit of the companies footing the bill, have already prompted strong condemnation from representative organisations such as the International Federation of Freight Forwarders Associations (FIATA) and the British International Freight Association (BIFA).

CMA CGM introduced an ESS from 1 March 2020 for sailings from North Europe, Scandinavia, UK and Poland to the Mediterranean, Adriatic and North Africa, adding a further charge in May. This scattergun approach of raising costs with no recourse for exporters who may have already committed to sailings is leading to a rising tide of bad feeling.

BIFA Director General Robert Keen, observed that forwarders do all they can to minimise the effects of the surcharges but in the end costs need to be passed on to the customers, leaving sometimes ‘an unfair perception that our members are to blame’ in the eyes of shippers. Without mentioning CMA CGM by name he commented:

“Forwarders do not like shipping line surcharges of whatever nature and, along with other groups, we have been challenging their legitimacy on behalf of our members, and their customers, for many years.

“The line in question says the Emergency Space Surcharge is part of continued efforts to provide customers with reliable and efficient service. BIFA says that the lines are cashing in on a crisis in global container shipping, created in no small part by their own actions.

“Over the last few years, we have seen surcharges for fuel, equipment imbalance, the peak season and currency fluctuations. The number of surcharges and fees continues to grow, often with no real explanation or justification. For instance, what does an extra ‘administration fee’ or ‘container sealing fee’ cover that is not in the standard service offered?”