Further to yesterday's
member notice, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) made contact this morning 10 September 2020 with the Mediterranean Shipping Company (MSC) and followed up with formal correspondence.
Our advocacy outlined concerns about the introduction of an import / export Sydney Port Congestion Surcharge (USD 300 per TEU) effective 14 September 2020 (US trade lanes to commence from 8 October 2020 - delay due to the US Federal Maritime Commission regulation that prescribes a minimum 30 day notice period for variation in surcharges).
FTA / APSA noted in its correspondence to MSC that this surcharge will have a significant impact on landed costs and will leave many importers, exporters and freight forwarders out of pocket due to down-stream supply chain contractual agreements.
FTA / APSA urgently request that MSC remove this immediate applicable surcharge from 14 September and provide industry with a minimum 30 days' notice on any price increase. COMMENTARY- As outlined in the MSC notice, the rationale for the surcharge is because MSC has faced congestion at the port of Sydney due to industrial action. If MSC's service providers are not performing (i.e. the stevedore) for whatever reason, it is our expectation that MSC be compensated by them rather than imposing a penalty (surcharge) on MSC's commercial clients.
- Putting the above point aside, MSC is naturally free to adjust market rates and surcharges as seen appropriate and for commercial negotiations and ultimately agreements to be established with importers, exporters and freight forwarders. This is appropriate in a free, open and genuinely competitive market.
- While there is clearly a risk that other shipping lines may follow the MSC lead (similar to how stevedores and empty container parks have followed each other in the massive and ongoing increases in Infrastructure Surcharge and slot booking fees) we trust that there has been no collusion between shipping lines and that alternate 'congestion surcharge' free options will be available for industry to make a decision for future transactions. We will bring this to the attention of the Australian Competition and Consumer Commission (ACCC) to monitor.
- The MSC notice shows a complete disregard for the Australian trade sector and rubs salt into the wounds of a trading community already suffering with an economic downturn and operating via a port in total disarray with further blow-outs in operating costs caused by empty container parks being full, massive volumes of re-directions , staging / storage of containers and ongoing shipping line container detention fees (not to mention a myriad of growing unregulated surcharges by shipping line contracted parties).
- If nothing else, perhaps this action by MSC has brought the underlying issues to a head and those government officials in copy to our correspondence will take notice and take desperately needed action.
LETTER TO MSC AVAILABLE
HEREPaul Zalai - Director and Co-Founder, FTA / Secretariat, APSA