Monday, 18 August 2008 05:30
The 5th Annual Meeting of the Asian Shippers’ Council (ASC) held in Macau on 18 August 2008, was hosted by the Macau Shippers’ Association. The meeting was attended by representatives from 20 shippers’ councils of 16 countries in 5 regions.
Highlights of the Meetings Delegates deliberated on issues of common concern, including Maritime Regulatory Reform, Surcharges, Freight Transportation Security, Air Freight Transportation, Infrastructure Challenges, Carbon Emissions and Incoterms.
Maritime Regulatory Reform
The implementation of the repeal of Regulation 4056/86 by the EU on 18 October 2008 will herald in a new stage for shipping. We will see a shift away from rate setting conferences to a market-based mechanism, on which rates are established based on negotiations between shipping lines and shippers.
We believe that what has begun in Europe will have ripple effects around the world. And in the US there is a call for review of the Ocean Shipping Reform Act. In Asia, China’s antitrust law has been put into full implementation from 1st August 2008, which is going to bring about a more market-based system in shipping. Unlike Singapore and Australia, China has made no block exemption for shipping conferences.
With its sizeable volume of imports and exports, China is in a strong position to bring about changes in the obsolete conference system, an anachronism in this modern age of free market principles.
We take this opportunity to call on the Chinese government to revise the present Maritime Regulations which allow collective rate setting activities. Failure to do so will result in unnecessary confusion, which will invariably be exploited by shipping lines to advance their interests.
The meeting expressed its concern on the aftermath of the reform to make sure that it will not lead to any unhealthy business environment.
Surcharges The list of charges and surcharges that shippers are asked to pay on top of freight rates for sea transport has continued to lengthen. There is an extra charge for just about everything – Terminal Handling Charge (THC), Origin Receiving Charge, Bill of Lading Fee, Documentation Fee, Equipment Management Fee, Container Seal Charge, Port Security Fee, Currency Adjustment Factor, etc. There should only be allin freight rates.
We accept that surcharges are sometimes necessary – in times of war, when port congestion is severe or when bunker prices hit the roof. As these are exceptional circumstances, the surcharges needed to defray the increased cost therefore should be temporary in nature, introduced after consultation with shippers.
What is most unacceptable is the Emergency Bunker Surcharge (EBS) imposed by shipping lines in the Taiwan to Hong Kong/South China trade. The EBS, which is being forced on consignees in Hong Kong and South China goes against the norm of international shipping practices. Traditionally charges and surcharges are collected from the party that pays the freight, but in this instance, consignees have had to stump up HK$440/RMB 400 per TEU, regardless of whether freight has already been prepaid in Taiwan.
China Shippers’ Association (CSA) has raised this issue with China’s Ministry of Transport and Communications’ (MOCT), and the ministry has concurred with CSA’s position that the EBS was unreasonable. It had informed the lines concerned to observe the rules.
The Hong Kong Shippers’ Council, Macau Shippers’ Association and Shenzhen Shippers’ Association have taken joint actions to oppose the charge. The organizations also called for government intervention.
Asian shippers have to be most careful to check for shipping lines’ further attempts to exploit the fluctuating fuel prices to impose hefty emergency surcharges.
Review of INCOTERMS Incoterms are a set of international rules for the interpretation of the most commonly used trade terms for foreign trade. They deal with two key aspects in international contracts in sales, namely the carriage of goods from seller to buyer and export import clearance, and specifies the division of costs and risks between the parties.
First published by the International Chamber of Commerce (ICC) in 1936, recent revisions have been made every 10 years, in 1980, 1990 and 2000, to account for changing modes of transport and document delivery.
For its next revision, the ICC should take into consideration certain ground realities. In view of the widespread application of non-transparent surcharges such as the THC, the ICC should review and revise the Incoterms to explain the division of costs and risks between the parties as well as how and when the terms of a bill of lading such as CY/CY, CFS/CFS and Door/Door etc are to be interpreted under liner terms. The Incoterms should explain in detail who the carriers, irrespective of whether they are land, sea or air based, should charge for third party costs.
The delegates expressed their strong appreciation of the valuable efforts of the Macau Shippers’ Association in successfully hosting the Asian Shippers’ Council’s 5th Annual Meeting.
Mr. John Y. Lu, Chairman of Singapore National Shippers’ Council was re-elected as ASC Chairman for the term 2008 – 2009.
Dated this 18th day of August 2008 at the Mandarin Oriental Hotel, Macau.
