Shippers propose date to challenge export price hikes

The Freight Transport Association's British Shippers Council has started lining up some of the UK's major ports, freight forwarders and trade associations for a session at the beginning of December, to which it will also invite the shipping lines.

The purpose of the meeting is to look at increasing charges being proposed by members of the Far Eastern Freight Conference incrementally since October – which have seen prices for shipping waste materials such as paper effectively double. The Association wants to persuade shipping lines to consider alternative ways of overcoming increasing demand for their vessels (see letsrecycle.com story) .

Although the Council is most concerned with proposed congestion levies on Eastbound trade – which does not affect recyclers- it is hoping to convince the shipping lines to break free of all pricing increases recommended by the FEFC.

This is because from October 17 next year, the institution and its price recommendations will come under competition law – and therefore will no longer be allowed to suggest industry-wide price rises.

Chris Snelling, FTA's head of global supply chain policy, explained: “We are hoping to have a meeting in the first couple of weeks of December. When we have a proven date we will try and get the shipping lines involved as well.”

FEFC

Responding to the proposals, the Far Eastern Freight Conference said that it would be willing to discuss the price rises  but that competition law would not make any difference to the need for shipping lines to charge higher prices for Eastbound freight, due to the increasing cost of fuel and demand for ships to carry more profitable Westbound cargo (see letsrecycle.com story).

The FEFC's Rod Riseborough said: “The law changes in October next year but the fundamentals of sailing a ship Eastbound from the UK and the fact that it does not pay will not change.”

Mr Riseborough said that, at the moment, shipping lines were still free to make up their own minds about pricing and the only thing which was likely to change for shippers next year was that prices were likely to become more volatile.

At present, the FEFC explained that prices and strategies depended on the shipping line and that while some shippers were refusing to even fill their Eastbound vessels to full capacity due to the cost, non FEFC members like the two Chinese companies Cosco and China Shipping were insisting upon filling their vessels.

Mr Riseborough said: “I hear that a lot of the waste materials are moving with the two Chinese lines. They are happy with the volumes they are getting at the rates they are getting.”

IWPPA

David Symmers, chief executive of the Independent Waste Paper Processor's Association, acknowledged that some shipping lines acted outside of FEFC recommendations and that some were undercutting FEFC members, which was benefiting exporters of recovered paper.

However, he said that this did not provide enough capacity for all Eastbound cargo and that the FEFC price rises were in danger of threatening the entire recycling industry if they got any worse.

He commented: “If you can't absorb them eventually the price will go so low you may see it put in landfill. That hasn't happened yet but I don't think is it far off. The whole market is coming down – it's not healthy.”