ELAA report claims industry-wide surcharges confusion

ELAA report claims industry-wide surcharges confusion    A study commissioned by European Liner Affairs Association, the Brussels-based lobby group of container shipping lines, reported that shippers and other members of the freight transport industry are confused by the methods of calculating freight surcharges.
   The report was undertaken by the Center for Maritime Economics and Logistics of Erasmus University Rotterdam. MEL’s brief was to ascertain understanding of and attitudes towards terminal handling charges among both terminal operators and shippers and consignees. It also reviewed with cargo owners the system of currency and fuel adjustment factors.
   The MEL study found “hardly any knowledge of how CAF (currency adjustment factors) and BAF (bunker fuel adjustment factors) surcharges are calculated,” with shippers feeling that the surcharges were “meant as an additional money maker for the lines.” MEL said that forwarders had fewer objections to the surcharges, though they were keen to see both surcharges and terminal handling charges included in the ocean freight, on which they traditionally are paid a commission.
   The report also highlighted a general ignorance regarding terminal handling charges among cargo owners, forwarders and terminal operators themselves.
   “These divisions show there is a need for further consultation with the appropriate bodies. For instance, it will be necessary to reconcile some parties’ fear of carriers adopting a fragmented approach to surcharges with their dislike of a mutually agreed calculation mechanism. It may be that during this consultation the risks of uncertainty and the benefits of stability become more generally accepted,” said Chris Bourne, ELAA executive director.
   The ELAA recently proposed a plan to introduce an information exchange system, which would include the setting of formulas for fuel surcharges and other ancillary surcharges, in response to moves by the European Union’s competition directorate to repeal EU regulation 4056/86, which grants liner conferences an exemption to set common freight rates and cooperate on capacity.