Date: 07.01.2021

Regulators circle shipping lines

As container freight rates continue to rise from Asia, regulators in China and the US are raising concerns and the European Commission is being urged to consider whether the carriers’ behaviour is damaging trade growth at a time of economic recession.

Chinese regulators are renewing their carrier investigations, driven by concerns over volume controls and blanked sailings, while the United States’ Federal Maritime Commission (FMC) has worries that US export cargo is being refused, in favour of carriers repositioning containers directly back to Asia, to load export cargo offering considerably higher revenue.

And while many countries around the world have summoned liner executives to probe escalating freight rate prices, Europe has remained quiet, much to the dismay of shippers and forwarders.

In a joint letter sent to the Competition Directorate of the European Commission on Monday, the European Freight Forwarders Association (CLECAT) and the European Shippers’ Council (ESC) have raised concerns about carriers’ violating contracts, creating unreasonable conditions and unilaterally setting of rates far in excess of those agreed in contracts.

The associations will meet the commission within days to further demonstrate the damage carriers’ behaviour is causing to trade growth at a time of economic recession, with rates virtually quadrupling in the last 10 weeks of 2020.

The ESC and CLECAT claim that carriers have been reserving for themselves the ability to change rates whenever they see fit notwithstanding the specific rates and charges agreed and that they are continuing to top their rates with surcharges and general rate increases. 

Similarly, shippers and forwarders are being confronted with refused bookings and rolled cargo if carriers deem it more profitable to accept higher rated cargo for a particular sailing. 

Unacceptable practices, they assert, include imposing an extra fee as a price for accepting cargo at a new tariff charge, simply refusing to accept bookings at all for customers and forcing customers with contract rates to move cargo at spot rates, at a much higher price.

ESC and CLECAT warn that the “adverse consequences of carriers’ practices” are being felt equally by small and big businesses alike in Europe including retail, fashion, automotive, cosmetics and IT businesses.

While we have, like the rest of the market, seen significant prices and volume pressures on all major sea freight markets, our carrier partners have honoured agreements and have been, as far as they can be, proactive in their support.

Metro negotiate rates and volume agreements with a broad portfolio of carriers, across the three alliances, to offer our shippers the widest range of service offerings, port-pairings and rates.

For further information contact Ian Barnes, who would be delighted to talk to you about your situation.