British shippers blast FEFC charges

British shippers blast FEFC charges

Related Stories •   FEFC adding United Kingdom congestion charge •   FEFC raising westbound rates

The British Shippers' Council today condemned the recent U.K. congestion charge imposed by the Far Eastern Freight Conference as an “outdated and inappropriate” method of solving gridlock at the nations ports.
   The 16-carrier-strong FEFC last week said it would charge an extra $145 per TEU for westbound cargo from Asia to the United Kingdom from Dec. 1 to recover carriers’ estimated costs from congestion.
   The volume carried by FEFC lines into the United Kingdom has increased by more than 15 percent year-on-year after eight months of 2007, averaging 485 TEUs per day. The increased volume has overstretched U.K. ports and its inland network so much that a number of carriers have opted to skip U.K. calls from their itineraries and instead feed cargo in from continental Europe.
   The British Shippers' Council (BSC), which is a part of the Freight Transport Association, said that after reviewing the situation with the port industry, it believes the surcharge will only act to add costs to getting goods into the United Kingdom without solving any of the problems, which it said the carriers themselves are partly to blame for.
   “There are huge problems with congestion at Britain's ports, but introducing a charge does nothing to address this. This is a very outdated and inappropriate response by the conference to a complex problem,” said Christopher Snelling, the FTA's head of global supply chain policy.

Snelling

   “One of the causes of congestion at the ports is lines missing their berth slots for delivery, so to some extent the lines are surcharging customers for their own failings!
   “Instead of imposing a charge, the lines, not the conference, should have come to their customers and to the ports to discuss their problems and to work together for a solution.”
   The FTA said it will relaunch its best practice guide, Beating Port Congestion, that in 2005 brought together a number of important stakeholders in the maritime supply chain to find a constructive and collaborative approach to the problem.
   Snelling added that the FEFC’s recent rate restoration plans are “above proper market levels” that do not reflect genuine supply and demand pressures. He said they are merely designed to set a higher rate benchmark for when conferences are abolished under EU competition law in October 2008.
   “At the BSC meeting members reported lines being willing to undercut FEFC rates by 25 percent, showing that their levels are artificially high,” Snelling. said
   “Hopefully this will be seen across industry and the FEFC rates will fail to gain credibility. Concern remains that smaller shippers may not be in such a good position to bargain.” ' Simon Heaney