The Far Eastern Freight Conference in London- an organisation which represents the major shipping lines serving the Far East- has announced that the freight charge for sending containers abroad is to rise from October 1 2007.
In particular, the price of sending either 20 foot or 40 foot containers of waste paper, plastic or timber and scrap metal to main ports in the Far East is to rise to $250, with this rising to $350 for material sent to Japan.
The reason for the change is that exports are currently costing shipping lines more money than they are worth because they are delaying the progress of ships back to the Far East and tying up containers which can be used for finished goods.
The $250 freight charge makes up only one part of the overall cost of exporting waste materials, alongside charges such as port costs. Shipping lines currently only impose a nominal freight charge – meaning that the new charge will create a significant extra cost to the overall total.
A statement from the organisation said: “FEFC Lines wish to remind customers that the new eastbound tariff will be implemented with effect from 1st October.
“The new tariff will comprise elements in the Ocean freight, THCs [Terminal Handling Charges] in Europe and Asia, Outport Additionals in Europe and Asia and surcharges, such as, but not limited to, BAC [Bunker Adjustment Factor – An adjustment in shipping charges to offset price fluctuations in the cost of bunker fuel].”
Disrupting
The FEFC explained that despite exports to the East growing in volume, ships were taking longer to fill up with lower-value cargoes thereby delaying them from importing high-value products.
It said: “Despite strong growth in the eastbound volumes, Lines are facing a widening gap between inbound and outbound cargo flows, which has led to European port congestion, vessel scheduling difficulties, equipment shortages in certain areas and unsuitable levels of expenditure managing the situation. Lines can no longer cover such additional costs from the present revenues.”
The freight price increase applies to all FEFC members, including Maersk Line, ANL Container Lines Pty Ltd, Egyptian International Shipping Co and the Orient Overseas Container Line.
Bill Davison, of the pricing department at Maersk UK, said: “There is a price increase because a lot of the lines are finding their rates are far too low and it is not cost effective.”
Paolo Maiero, of the marketing department of shipping line Cosco (UK) Ltd, added: “As far as we are concerned, the reason that the sea freights going to the Far East are no longer bearable and we are losing money. It is so low there is no margin of profit.”
Me Maiero explained that at present, Cosco charged an all-inclusive price of £309 to export a 40 foot container of waste paper or plastic, and said he expected this could rise by about £100.
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