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Home | Internacional | China to tighten inspection on box shipping carriers’ pricing practices
Postado em 7 de janeiro de 2021 | 21:37

China to tighten inspection on box shipping carriers’ pricing practices

The transport ministry said it will step up efforts to examine whether carriers have performed their rate reporting duties properly, while also pledging to prompt further increases of vessel supply and container availability.

China’s Ministry of Transport has defended carriers’ reasoning when responding to a shipper’s complaint about skyrocketing container shipping costs, but has said it will tighten its scrutiny on carriers’ pricing practices.

The move followed a September meeting held by the Chinese regulator and participated in by a slew of container lines, which had attempted to curb freight rates. This effort largely failed amid a pandemic-disrupted market.

While the last “consultation” had led to increased sailings on long-distance trades, such as China-US, rates on Southeast Asia routes had kept rising, a Guangdong-based trader wrote in a message left on the government website recently. “Hope the state will stabilise the shipping rates,” the person said.

In response, the transport ministry said the markups were partly because of a rapid growth in shipping volume since June last year, with drivers including the restoration of China’s production level and the recovery of buying demand in large consumer countries.

“The short-term mismatch between vessel supply and demand remains despite carriers’ measures to reinstate blanked sailings, improve the density of services and replace smaller vessels with bigger ones,” said the ministry.

Port congestion in foreign countries due to continued coronavirus disruptions and the resulting shortage of empty containers in China were also cited as main reasons that have constrained the carrying capacity.

These arguments are largely in line with what carriers have offered to explain the record-high rates on multiple international trades.

The Shanghai Containerised Freight Index in recent weeks, for example, saw transpacific spot rates exceed $4,000 per feu, Asia-Europe rates top $4,000 per teu, West Africa rates above $6,000 per teu and East Coast South America rates breach the record of $8,000 per teu.

The transport ministry, nevertheless, said it will step up efforts to examine whether carriers have performed their rate reporting duties properly, while also pledging to prompt them to further increase vessel supply and container availability.

Sources close to the ministry said it and other related government departments are gearing up to hold another discussion with box shipping carriers amid mounting pressure from the country’s shipper community.

Lloyd’s List has approached the ministry for comments.

In a joint letter sent to China’s Ministry of Commerce last month, the China International Freight Agency Association and the China Shippers’ Association said carriers’ illicit pricing measures have “significantly affected and disrupted” the country’s foreign trade and the international logistics markets.

The pair accused container lines of imposing and misreporting excessive surcharges, for example when shippers delayed the delivery of cargo or reporting of the verified gross mass, among other incidents.

Some shipping companies even requested additional fees of $350 per teu after the slot booking was confirmed, or forced customers to accept bundled road transport services, to take advantage of the shortage of vessel space and equipment, they added.

The two concluded the letter by suggesting that government authorities, including the Ministry of Commerce, the Ministry of Transport and the State Administration for Market Regulation should launch an antitrust investigation into such practices.

A Shanghai-based shipper remained doubtful about how much the government could alter the direction of the freight markets this time.

“The previous consultation didn’t stop the soaring rates. I don’t think another one will bring about a miracle,” he said.

However, carriers seem to be cautious this time about pulling back capacity.

Only a handful of void sailings have been announced six weeks from the Chinese New Year, with 2-4% of the total three-week holiday capacity cancelled on the transpacific and 6-13% on Asia-Europe routes, according to Sea-Intelligence.

To match the average level between 2017 and 2020, carriers need to blank an additional 48-56 sailings on transpacific and 18-21 on Asia-Europe, the consultancy estimated in a report.

It said the uncertainties from the virus impact has made it difficult for carriers to plan their capacity deployment.

“There does not seem to be any consensus forecast of the production impact of CNY 2021, with scattered reports of some Chinese factories offering bonuses to workers to work through the holidays to support the demand boom, while there are contradicting reports that CNY 2021 shutdowns may be longer and deeper than in previous years, due to coronavirus travel restrictions and a flare-up of coronavirus in Hong Kong in December.”

The number of domestic infections has ramped up over the past week in China, with new cases found in multiple cities.

 

 

 

Source: Lloyd’s


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