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Home | Internacional | Shippers worldwide ‘furious’ at ‘chaotic’ ocean freight market
Postado em 18 de fevereiro de 2021 | 18:15

Shippers worldwide ‘furious’ at ‘chaotic’ ocean freight market

Crisis reflects ‘insufficiency’ in the current regulatory mechanisms in protecting the well-being of the global supply chain and shipping industry, claims Global Shippers’ Alliance. Shippers worldwide are “furious” at the chaotic state of the ocean freight market and the lack of mechanisms to resolve it, according to the Global Shippers’ Alliance (GSA), which represents the logistics interests of manufacturers, retailers and wholesalers.

Sustained buoyant demand, tight vessel capacity and an acute lack of available empty containers in key export locations has led to major congestion at certain key ports, affecting freight flows and supply chains globally and triggering a surge in shipping rates.

“Production, marketing activities, and distributions are all disrupted and the economic costs are beyond measure”, said Chairman Denis Choumert,who is also Chairman of  the European Shippers’ Council (ESC).

For his part, Godfried Smit, Secretary General of the ESC, noted: “Many major European ports are jammed, while container ships are waiting for a berth, inbound containers are sitting in the terminals to be cleared and shipping lines are refusing outbound bookings because they want to expedite return of the containers to the Far East”. Godfried went on, “outbound freight rates have risen 5-6 times and exporters may still not get a booking”.

The GSA said it was a similar picture in the Far East, as Toto Dirgantoro, Chairman of the Asian Shippers’ Alliance and the Indonesian National Shippers’ Council, explained:

“Freight rates from the Far East to Europe have increased 10 to 15 times on some occasions and 3 to 4 times to North America, even for contract rates, and spot rates would be much higher. Shipping lines are accepting bookings based on profitability or long-term strategic importance, and, hence, small to medium sized shippers are sacrificed”.

Worse still, the GSA observed, the  industry is suffering from a rapid deterioration in reliability and visibility. “Ships are skipping ports and even cancellation of the entire string is common”, said Choumert. “We call this practice blank sailings and their number in some trade increased as much as 30% lately. As little as 50% of ships arrive on-time – this affects the whole supply chain.”

Marianne Rowden, immediate past President and CEO of the American Association of Exporters and Importers, claimed that the number of ships queuing at major US ports is rising.

“While COVID-19 lingers on and city lockdown continues, pressure on the transportation system and the whole supply chain is heavy. The Federal Maritime Commission has been asked to look into the supply and demand situation, and we look forward to an increase of capacity shortly”, she said.

The GSA said that Asian shippers also complain that shipping lines have taken advantage of the situation and levy a large number of “ridiculous” new charges like the Booking Confirmation Fee, the No Show Fee, the Late Cancellation Fee, the Container Retention Fee, the Expedite Booking Fee, etc.

Resolution of the current situation might be well beyond competition authorities’ jurisdiction, the ESC underlined, the shipper body having met with the European Union Competition directorate in January 2021.

“Shipping lines need to release more core information about capacity planning, capacity changes, service changes, demand forecast, etc. to clear themselves out of collusion claims. Shippers have little access to this sort of information and should rely on relevant authorities to safeguard their interests. Shippers are never on the same playing field with liners,” Godfried remarked.

The GSA is keen to to highlight “the specific responsibility that carriers have to endorse in exchange for the protection they have from standard competition laws. This protection has been granted to carriers globally: the alliances of carriers are now the ‘gatekeepers of international trade’ as they play a crucial role in the competitiveness of many businesses. They should not abuse of these privileges as it seems to be the case today.”

The ESC continued: “For us shippers, it is worrisome that the European Commission recently allowed the renewal of the block exemption for liner shipping consortia without adding any tool or adjustment to check liners and better consider shippers’ interests, which could have been instrumental in preventing or mitigating some of the damage shippers are currently suffering.”

GSA is aiming to establish a dialogue between all the market participants with the view of finding a common approach to the current market problems and setting up an action plan regarding the overall ecosystem.

It considers that the shipping crisis “reflects insufficiency in the current regulatory mechanisms in protecting the well-being of the whole global supply chain and, particularly, the wellbeing of the shipping industry – a lifeblood of global trade. These mechanisms need to be reviewed immediately.”

The GSA comprises  the Asian Shippers’ Alliance (ASA), the European Shippers’ Council (ESC), and the American Association of Exporters and Importers (AAEI).

 

 

 

Source: Lloyd´s


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