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Global Supply Chain News: Container Carriers are laying on Big Extra Fees on Top of Sky High Rates

 

It’s Madness One Forwarder Says, with Concerns Soaring Costs could Take some Importers Under

 

 

July 20, 2021
SCDigest Editorial Staff

Shippers and importers are groaning under the weight of soaring rates to ship ocean containers – The Shanghai Containerized Freight Index (SCFI), which tracks average container shipment costs for moves from the port of Shanghai, crossed the 4,000 mark for the first time last week, four times its historical average.

Supply Chain Digest Says...

 

“This madness has to stop,” one freight forwarder from Great Britain told The Loadstar.

 
 

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The index, which has sagged below the 1,000 levels for most of the past decade, has been breaking records most weeks this year, passing the 3,000 mark just in May, and now crossing 4000 a few weeks later.

But to add insult to injury for shippers, container carriers are using their market advantage to extract even more profits, with a variety of additional fees on top of soaring box rates.


For example, German container carrier Hapag-Lloyd recently added a “value-added surcharge” of $5,000 per 40-foot container for moves from China to the US and Canada.

The carrier sent a letter to customers that this giant new fee is the result of “extraordinary demand from China and the resulting operational challenges along the transport chain.”

Hapag-Lloyd said the surcharge would be implemented beginning August 15 and would “replace other ad-hoc surcharges like the SGF” (shipment guarantee fee), which the The Loadstar.com website says is $1,000 per 40-foot container currently – though SCDigest has heard of much higher fees to guarantee a box makes it onto a ship as scheduled.

The Loadstar also reports, for example, that some carriers, including Zim, Cosco and ONE, have been charging Asia to US west coast shippers more than $7,000 per container for so-called “value-added products,” including guarantees, on top of their normal spot market rates.


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In fact, it appears a growing number of carriers, depending on the lane, are now ignoring contracts and forcing shippers to accept their sky-high spot market prices and the significant surcharges.

The total costs are now so high there are concerns it could put some importers out of business, as they are unable to push the soaring logistics costs off to customer.

“This madness has to stop,” one freight forwarder from Great Britain told The Loadstar, adding that the way some carriers were treating their customers was “shameful”.

A recent analysis from the International Air Transport Association (IATA) shows air cargo is currently only about six times more expensive than ocean freight, compared with a normal spread of about 12 times.

 

What do you think of these extra container charges? Let us know your thoughts at the Feedback section below


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