The shipping advocacy group adopted the goal of ending container shipping charges, which it said can sometimes exceed the contracted price for shipments making the management of total shipping costs unpredictable for cargo owners.
The Global Shippers Forum (GSF) is calling for container shipping surcharges to be eliminated by 2020.
The shipping advocacy group, whose membership includes the National Industrial Transportation League and Freight Management Association of Canada, adopted the goal of ending the surcharges at its annual meeting in Colombo, Sri Lanka.
GSF is promising a campaign of “naming and shaming the worst examples of opaque and unjustified surcharges.”
GSF said, “Surcharges are additional and often arbitrary charges applied by some shipping lines and forwarders to the contracted costs of moving freight containers and are a source of intense frustration to their customers (shippers) around the world. Shipping lines and forwarders often threaten to not transport containers if their surcharges have not been paid, putting intolerable pressure on shippers to ‘pay-up or get left behind.’ ”
“Shippers of goods around the world have had enough of demands made by carriers and forwarders for the payment of charges that are poorly explained or out of proportion for any service provided,” GSF Secretary General Chris Welsh said.
He promised “a series of actions that will expose the scale and injustice of the practice to world trade bodies and if necessary publicize the worst examples notified to us.”
Welsh said in an interview that in developing countries, there are many small and medium sized companies that are free on board or “FOB” sellers – where the shipper is responsible for getting goods to the port and onto the ship.
“They are in a weak bargaining power to resist local surcharges and charges that are applied to them,” he said. “One of our aims is to make the various trade bodies that are responsible for trade facilitation to be aware of the fact that these can represent significant impediments to part of the world in developing their trade through these high charges.”
GSF said both the reasons given for applying a surcharge and the scale of charges are growing. Shippers claim they are not related to the true costs of the service being provided.
On the Asia-North Europe trade routes, surcharges amount to $250 per container.
To put that into perspective, the Asia-Northwest Europe spot freight rate reported by the Shanghai Shipping Exchange’s Shanghai Containerized Freight Index – which reflects the ocean freight and the associated seaborne surcharges – on Friday reached $1,125 per TEU, up from $713 per TEU a week earlier.
Surcharges can sometimes exceed the contracted price for shipments making the management of total shipping costs unpredictable for cargo owners, GSF explained.
Welsh said that surcharges are disrupting efficient world trade. “Our campaign will expose the extent of surcharging and make it an issue in future trading agreements,” Welsh said. “At times of subdued economic growth, this is damaging to world trade and causing distortions in local markets.”
GSF said it will seek to make the World Trade Organization and United Nations bodies aware of the scale and impact of surcharges. The group also said it would seek the amendment to the International Chamber of Commerce’s INCOTERMS “to make clear who is responsible for the settlement of certain costs currently recovered through surcharges.”
In some cases it’s not clear why surcharges are being levied, Welsh explained.
“Often they’re just an add-on that the freight forwarder, the terminal operator or the carrier applies as a sort of standard item in their invoice,” he said.
A good example, Welsh said, is that some carriers, freight forwarders and terminals have started to issue charges related to the requirement under the Safety of Life at Sea convention for shippers to provide verified gross mass of loaded containers.
In some cases, “there are legitimate services that may be provided where a shipper
opts to use a particular service that a forwarder or a carrier or a
terminal may offer for weighing a container or whatever,” Welsh said.
However, Welsh noted than in other cases, “It’s just a standard administration fee without it being clear what service, if any, is being provided.”
In addition to the U.S. and Canada, other members of the GSF include groups representing shippers from Argentina, the United Kingdom, Africa, Australia, New Zealand, Australia, Sri Lanka and Korea.
Other shipper groups have also highlighted their concerns about surcharges. For example, the Global Shippers Alliance said last year members discussed “a more sustainable pricing model especially on
the topic of surcharges. Now dozens of indistinct surcharges usually
amount to more than the naked transport price.”
It contrasted that with airfreight where it said “see the first airlines moving away from
surcharges and present an all in price. Shippers are happy with these
developments and hope the same can apply to maritime transport in the
near future.”
GSF was formed by the American Association of Exporters and Importers (AAEI) in the U.S., the Asian Shippers’ Association (ASA) and the European Shippers’ Council (ESC) in March 2015.
Global Shippers’ Forum calls for elimination of shipping surcharges
