FEFC set to raise eastbound rates

THE Far Eastern Freight Conference is set to publish a revised tariff in the Europe to Asia Eastbound Trade, pushing up freight rates..

A statement from the secretariat says: “The eastbound trade has been growing steadily for many years and has reached a volume of around 5 million TEU per annum, which puts it among the largest trades in the world.”

But is notes: “Shipping Lines in the westbound trade, which is experiencing even greater growth, have invested heavily in new and upgraded services and equipment to meet customers’ requirements. Asian exporters have an unrivalled range of opportunities for handling westbound cargo shipments into Europe, and freight rates have risen in line with the unprecedented levels of demand. But for a variety of reasons the corresponding eastbound trade has not seen similar developments in freight rates, prompting some Shipping Lines to question the rationale for providing such a high level of service options to European shippers for so small a return. This, in combination with the overriding need to cut container turn-times and reposition empty equipment back to Asia for the westbound trade, has given impetus to a drive for improved eastbound revenues in a bid to save the present eastbound services.”

The statement continues: “The weakening of the US dollar and the escalating costs of fuel have hit carriers hard, and the eastbound trade can no longer be considered worthwhile when viewed in isolation. Some drastic action is therefore necessary. In an announcement of 16th July, FEFC Lines advised that a revised tariff structure will be implemented in the Mediterranean / Far East trade with effect from 1st October. The tariff will comprise an ocean freight element, subject to BAF and CAF as published by the FEFC from time to time, Origin THC and Destination THC. There will also be additional charges – for example, for the provision of special equipment, charges for serving outlying areas, for the carriage of hazardous cargoes, etc.”

The conference, which is set to be abolished by EU anti-cartel law, concludes: “The FEFC Lines are confident that this timely revision of the tariff will provide transparency for customers, and that the greater stability of the tariff structure will allow them to sustain the present high levels of service provided in this trade.”