Importers face shipping surcharge
Spurred by higher cost of oil
Thomas Russell -- Furniture Today, December 10, 2007
HIGH POINT — Furniture importers will soon face new fuel surcharges on container shipments to compensate for the rising costs shippers are paying for crude oil.
By Jan. 1, shipping companies will charge a bunker or fuel surcharge of up to $950 per 40-foot container, up from $455 in January 2007.
Importers already pay much of that through previously negotiated rates for the 2007-2008 calendar year which runs from May through April. Because those rates vary from company to company, it’s unclear how much extra importers will pay. But sources familiar with the increase say it could be in the $300 range per 40-foot container.
The surcharge is on top of the fuel charges already negotiated into contracts, said David Bennett, a vice president of sales at Charlotte, N.C.-based Globe Express. He said this is the first time in about six years that shippers have instituted such a charge outside the normal contract negotiations.
“It’s a very serious situation,” said Bennett, adding that his company is negotiating rates on behalf of its clients. “If carriers aren’t able to recover some form of this cost increase, there is a risk they will further reduce capacity in the trade.”
Carriers could more of their business to more profitable routes, such as between Asia and Europe.
According to the Transpacific Stabilization Agreement, a research and discussion forum representing 15 major carriers that ship goods across the Pacific, ship fuel has risen from $295 per ton in early 2007 to $500 per ton today.
For 2008, new service contracts will be subject to floating bunker surcharges. It’s unknown how often those surcharges will occur, but it could be every month — the Jan. 1 surcharge is only in effect through Jan. 31.
The issue will undoubtedly cause some concern for importers as they try to budget for the year ahead. But one company official declined to panic at this early stage.
“That’s a marginal increase,” said Alex Sarratt III a partner in high end case goods importer Sarreid Ltd. “We can absorb that. It’s no big deal.”
The 15 carriers in the TSA are:
APL Ltd.
CMA-CGM
China Shipping Container Lines
COSCO Container Lines Ltd.
Evergreen Line
Hanjin Shipping Co. Ltd.
Hapag Lloyd AG
Hyundai Merchant Marine Co. Ltd.
Kawasaki Kisen Kaisha Ltd. (K Line)
Mediterranean Shipping
Mitsui O.S.K. Lines Ltd.
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Inc.
Yangming Marine Transport
Zim Integrated Shipping Services
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Importers face surcharges
Dec 16, 2007
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