European Shippers? Council: Carriers overcharging BAFs

European ShippersÆ Council: Carriers overcharging BAFs    The European Shippers' Council said today its members are being overcharged when its comes to fuel surcharges set by liner conferences Trans Atlantic Conference Agreement and the Far Eastern Freight Conference.
   Analysis for the ESC conducted by Meyrick and Associates found that TACA's published BAF level of $607 per TEU was $422 higher than the actual fuel costs, while the FEFC surcharge level of $456 per TEU was nearly $100 above the Meyrick estimate.

van der Jagt

   'We have had our suspicions that shippers paying these surcharges were being overcharged, but the results of this analysis have surprised even ESC,' said Nicolette van der Jagt, ESC's secretary general.
   'We will need to discuss these numbers with the carriers. The Meyrick analysis which ESC commissioned will need to be explained with the carriers to see how or why it arrives at BAFs much lower than the BAFs being charged by FEFC and especially TACA. We must remove the confusion and get greater transparency into the charges.'
   The ESC has long been a campaigner for fuel costs to be included in the overall freight rate, saying that shippers and carriers should be able to reach individual agreement over unforeseen cost rises or falls.
   'Of course we are not blind to the oil price rises over the past year, the scale of which have indeed taken many by surprise; but on the basis of this latest assessment, we suggest there is good reason for shippers to be very careful as to what surcharge levels they accept,' said van der Jagt.
   'Come October this year (when liner conferences will be banned in Europe), it will be vital for shippers and carriers to have a reliable and trusted method for calculating the fuel consumption and costs of the ships they use, on the routes they serve and on the service parameters they choose (such as frequency, speed, fuel type etc). We need to be able to remove any doubt over fuel costs covered in individual agreements, in order that shippers and carriers can build a relationship between them based on trust — something that the conference system and mechanisms have previously failed to do.' ' Simon Heaney