Peak season surcharges pique Asian shippers

Peak season surcharges pique Asian shippers    The Asian Shippers' Council on Monday denounced the growing practice of liner carriers charging peak season surcharges.
   A host of carriers have instituted such surcharges in recent weeks, particularly between Asia and Europe, as demand increases slightly ahead of what used to be the traditional peak season for containerized cargo.
   Carriers are justifying the surcharges, typically from $150 to $450 per TEU, by arguing that repositioning costs are increasing. The ASC held its annual meeting over the weekend in Sri Lanka, after which it issued a statement blasting the surcharges as well as the Transpacific Stabilization Agreement's efforts to raise rates among its members.
   'In a world caught in recession where shippers are finding volumes declining, shipping tonnage piling up and container space in excess, carriers are still finding it reasonable to charge a peak season surcharge which questions the very logic of market driven prices,' the council said. 'ASC denounces TSA's call for united actions of its members for rate increases, as well as carriers creating artificial space shortage through manipulation of capacity. These actions are disruptive to the proper functioning of the market.'
   Carriers on all the major trades have attempted to raise rates in order to bring them to what they consider sustainable levels, after nearly every trade took a major beating in the last quarter of 2008 and first half of 2009.
   The ASC said it was also against zero freight rates, as were reported in the Asia/Europe spot market in early 2009, as costs for ocean transport are then applied through surcharges. The burden of those surcharges, including terminal handling charges, often falls on exporters in Asia, not importers in Europe. The group argued that all-in rates are the only way to ensure a fair market solution.
   On other topics, the ASC lauded governments in China and India for passing competition regulations that restrict or eliminate cooperation between carriers, and it encouraged other government in the Asia-Pacific region to follow suit. It also suggested that the region take a holistic approach to aligning its liner regulations, similar to the one that European Union did in banning liner conferences in 2008. ' Eric Johnson