Shippers have paid ridiculous fees, but their shipments are still being rolled and carriers want to collect more

Although the massively increased rates include a premium fee, to ensure that container equipment and space are available, some shippers complain that their cargo was still rolled.

shanghai-port

Port of Shanghai, China

Short-term freight rates from China to Northern Europe have crossed the mark of USD 20,000 for a 40ft container, and transpacific carriers are quoting upwards of USD 25,000 to the US west coast.

And there is a report that prices are being quoted as high as USD 32,000 USD from Shanghai to Los Angeles this past week.

Loadstar has seen several quotes from the top five major carriers of USD 21,000/40ft for outbound shipments in July from Chinese ports to Felixstowe and Southampton, with an average of around USD 18,000.

Although these massive price increases include a premium fee to secure container equipment and space, some shippers complain that their cargo is still being "rolled".

A forwarding company said they paid ridiculous fees and thought everything would be fine, but then they heard from their agent that the cargo containers were still at the quay and shipping lines want to collect more to transport this shipment.

“Apparently, there was another sudden surcharges spike from the next vessel they insisted on charging, meaning their so-called premium fee was worthless,” he added.

And as the peak season approaches, it looks like the situation will get even worse for shippers shipping to Europe and the US.

They will need to prepare for another hike and the general rate increase (GRI) on July 1, along with another possible increase from mid-month and the PSS (peak season surcharge) for several thousand dollars.

A UK-based shipping company NVOCC told The Loadstar in the past week there was a "brief email" from his shipping line announcing the new price increase.

"We have supported them through thick and thin, even when their standing was pretty low in the industry, and this is how we get repaid", he said.

On the trans-Pacific route, shippers are facing similar problems. Jon Monroe of the consulting firm - Jon Monroe Consulting, said carriers have the ability to "manage costs" by "rolling" shipments, suggesting that the US Shipping Act needs to be updated to include a limit on the increase in freight rates and a provision to compensate both parties for non-performance under the contract.

Meanwhile, Craig Grossgart, head of global ocean freight services at Seko Logistics, confirmed to The Loadstar that one shipper was quoted USD 32,000 last week for a 40ft container shipped from Shanghai to Los Angeles.

"To be honest, I think it was a polite way of the carrier saying to the customer it doesn’t want to take its business", Mr. Grossgart said.

However, he said the figure of $25,000 per 40ft has been offered to a shipper who needs to move 300 containers from Shanghai and Yantian to Los Angeles in next month - "and that's a serious offer".

With the addition of the premium fee, plus a host of other fees, the gap between the spot rate market indexes and the actual freight being paid is widening week by week.

For example, the Nordic Freightos Baltic index currently stands at just USD 11,006 per 40ft container, and the FBX index for the US west coast is just USD 6,588.

Source: Phaata.com (According to The Loadstar)
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