Freight News, Sea

Shipping line practices are hitting economic growth, say customers

[ January 4, 2021   //   Chris ]

The Clecat European freight forwarders association and the European Shippers’ Council (ESC) have written to the Competition Directorate of the European Commission complaining that shipping lines’ behaviour is damaging trade growth. 
They complain of violation of existing contracts, unreasonable conditions for accepting bookings and unilaterally setting of rates far in excess of those agreed.
They say that carriers have been changing rates whenever they see fit, ignoring agreed charges and are continuing to top their rates with surcharges or general rate increases. Shippers and forwarders are being refused bookings and cargo is being rolled over if carriers deem it more profitable to accept higher rated cargo for a particular sailing.  Unacceptable practices also include imposing an extra fee as a price for accepting cargo at a new tariff charge, refusing to accept bookings at all for customers or forcing a customer with contract rates to move it to spot rates at much higher price.

The unprecedented number of blank sailings – up to 30% on some trades -, combined with the lack of reliability has led to the current shortage of empty containers. Carriers are trying to ship containers back to China as fast as possible, simply because there is a need and profits are extremely attractive which has led to a shortage of equipment for European exports with forwarders and shippers being confronted with ‘equipment imbalance surcharges’. However, say Clecat and ESC, if carriers decide to ship empty containers back to China for commercial reasons, it is doubtful whether this is justifiable.

They add that last year the European Commission extended the block exemption regulation for liner shipping which allows shipping consortia, but such agreements allow carriers to collectively agree on blank sailings. They urged the European Commission to take actions similar to those by authorities in other parts of the world. 

Tags: European Shippers Council; Clecat