BSC: UK suffer from unnecessary surcharge on imports

The Freight Transport Association's (FTA) British Shippers' Council (BSC) has today condemned the latest increase in costs imposed on the UK by the shipping lines' Far Eastern Freight Conference (FEFC).

The FEFC has announced the introduction of a surcharge on deliveries to the UK due to the levels of congestion in Britain's ports. This comes on top of recent rate hikes for goods going from Europe to the Far East.

The British Shippers' Council reviewed port congestion and received updates from the port industry at a meeting this week (Tuesday 6 November). The Council discussed the FEFC's announcement and concluded that the surcharge will add costs to getting goods into the UK without solving any of the problems.

Christopher Snelling, FTA's Head of Global Supply Chain Policy, said, 'There are huge problems with congestion at Britain's ports, but introducing a charge does nothing to address this. This is a very outdated and inappropriate response by the Conference to a complex problem.

'One of the causes of congestion at the ports is lines missing their berth slots for delivery, so to some extent the lines are surcharging customers for their own failings! Instead of imposing a charge, the lines, not the Conference, should have come to their customers and to the ports to discuss their problems and to work together for a solution.'

In 2005 FTA successfully brought together all the major stakeholders in the maritime supply chain to develop a best practice guide, Beating Port Congestion. In response to the FEFC's unilateral surcharge, FTA wishes to re-launch this initiative to try to bring the industry together in a more constructive and collaborative manner. FTA will be approaching the previous participants to take this forward.

On the FEFC's attempts to hold up rates generally between Europe and the Far East, Snelling said, 'BSC members believe these rates are above proper market levels, and merely a response by the Conference to its impending abolition under EU competition law in eleven months. The rates are unsustainable as they do not reflect genuine supply and demand pressures.

'At the BSC meeting members reported lines being willing to undercut FEFC rates by 25 per cent, showing that their levels are artificially high.

Hopefully this will be seen across industry and the FEFC rates will fail to gain credibility. Concern remains that smaller shippers may not be in such a good position to bargain.'