The French ocean carrier will implement a $150 booking cancellation fee from North Europe to the Red Sea, Middle East, India, Pakistan and Sri Lanka.
French ocean carrier CMA CGM will implement a booking cancellation fee from North Europe (North Continent, the United Kingdom and Scandinavia) to the Red Sea, Middle East, India, Pakistan and Sri Lanka effective June 1, the company said in a statement.
The fee of $150 per TEU on any equipment type excluding reefers will apply to all bookings cancelled or transferred seven calendar days or less prior to the vessel cut-off date and will be invoiced to the booking party.
CMA CGM said it was implementing the fee because it has been encountering a large amount of shortfalls for the last weeks due to late cancellations, which prevented the carrier from accepting bookings to take their place.
The issue of late cancellations is nothing new in the ocean shipping industry. Because contracts are not strictly enforceable, they are often not honored by either shippers or carriers, which has created a vicious cycle in which shippers book multiple slots for a single container to ensure capacity, and carriers overbook sailings to avoid empty slots. Carriers in the past have attempted to impose penalties for booking no-shows, but with little success.
In the past year or so, however, new tools have emerged in an effort to break this cycle of reciprocal abuse. A group called the New York Shipping Exchange (NYSHEX), for example, has developed what is called a “guaranteed forward contract,” an instrument that is protected by a neutral clearinghouse that would assess significant penalties to either side for failure to uphold their end of the deal.
CMA CGM issues booking cancellation fee
