South China shippers blast OOCL box seal fee

South China shippers blast OOCL box seal fee    South China shippers are up in arms over a fee to be assessed by Hong Kong-based liner carrier OOCL for container seals on outbound shipments from China, Hong Kong and Macau.
   The fee, announced by OOCL April 16, will be assessed from May 13 and will be HK$25 or 25 yuan per seal, depending on the origin of the cargo. That equates to $3.22 per seal from Hong Kong and $3.66 per seal from China.
   'The fee will be applied on a per container basis and a full additional amount will be assessed when an additional seal is requested by shipper,' OOCL said in the notice. 'Also this fee is a prepaid charge and will be collected prior to release of bill of lading.'
   Shippers in South China have decried the fee as unreasonable, and have floated the possibility of a boycott of OOCL's services.
   'South China shippers would not exclude calling for a boycott if OOCL refuses to withdraw the charge,' Sunny Ho, executive director of the Hong Kong Shippers' Council, told American Shipper. 'We will also tell our overseas buyers not to use this line that collects unreasonable charges ruthlessly.'
   Aside from the imposition of a fee they feel is unjustified, shippers' groups in Hong Kong, Shenzhen and Macau are unclear as to why the container seal fee is being applied only to cargo originating from South China. They said shippers there are already at a competitive disadvantage to other areas of China because terminal handling charges at ports in the Pearl River Delta region are up to four to five times higher than in other Chinese ports.
   The Hong Kong, Macau and Shenzhen shippers' councils put out a release last week blasting the charge.
   'To impose a seal charge from out of the blue is unconscionable of OOCL,' said Tolan Lam, Shenzhen Shippers' Association chairman. 'But what is worse is to come up with such an unjustified charge at a time like this. The seal is part of the container that the shipping line agrees to transport and for which we pay freight charges. To start charging for the seal at this point in time makes no sense at all.
   'Shippers have been known to shoulder charges in the past that have been reasonable and for services that deliver value. But to come up with a charge for something that is part of the transportation of a container, let alone for the protection of the carrier, is beyond comprehension.'
   OOCL told American Shipper it is aware of the shippers' concerns, with the Hong Kong Shippers' Council voicing its problems directly to the line.

Shen

   'We fully understand shippers' sentiments and realize the current economic climate is bringing enormous difficulties to businesses across the board,' Stanley Shen, director of investor relations for OOIL, OOCL's parent company, said in a statement to American Shipper. 'The container shipping industry has been hit particularly hard by the economic crisis. Most carriers are incurring heavy losses as volumes and freight rates have plummeted, and carriers are struggling to cover basic operating costs.
   'In order to meet increasingly demanding operating requirements, as well as to continue providing quality service and ensure the reliability of shippers' own supply chains, we have to recover as much of our out-of-pocket costs as possible. We believe this will help ensure that OOCL can continue to provide a high quality, sustainable, and reliable service for our customers.'
   Shen added that the container seal fee is not a new charge in the industry and has been collected through various channels across China in the past.
   'While shipping lines are facing difficulties, shippers indeed have been hit even harder in the financial crisis,' Ho said. 'Many shippers have been forced to close down their factories, or retrench their workers because of reduction in operations. We are in an even more difficult situation than many of the shipping lines. At least so far no major lines have ceased business.'
   Ho reiterated the point that the seal should be considered part of the container and part of the basic service that shippers already pay for.
   'We are unhappy because the seal is a basic for container transport and its expense has already been paid for via freight rate,' Ho said. 'OOCL has not provided extra service or given extra value and hence there is no justification for a new charge. In addition, the seal protects carrier against liability and there is no reason for charging shippers.' ' Eric Johnson