Ocean capacity is rising, demand is cooling, and 'the market is starting to turn'
Container spot freight rates on the main east-west ocean trades showed their first decline since ...
Maersk ship at Chittagong © Asmtamanna
Spot and contract rates for ocean services to Bangladesh are expected to rise following Chittagong Port Authority’s (CPA) decision to bar box lines from imposing extra surcharges.
Late yesterday, CPA cancelled its licences for two Maersk ships after surcharge-related violations, following the cancellation of seven CMA CGM vessel licences.
The Maersk ships were given licences on an ad-hoc basis, conditional on no surcharges or additional fees imposed on customers. Maersk has a 30% market share of Bangladesh’s export cargo.
A Maersk spokesperson said the “rate revision” had been withdrawn and was no longer on its website. In its announcement, the carrier had said: “To continue providing reliable and efficient service, Maersk will be revising the terminal handling charges (OHC/DHC) for all containers to and from Bangladesh, effective 15 October”. The charges ranged from $165 to $460 per box.
Shipping sector executives explained that without the licences, ships would be forced to wait at the outer anchorage, a move which has forced them to drop the extra charges. It is expected that box lines will increase the freight rate instead to absorb the higher charges Chittagong recently introduced, or face financial losses on the country.
CPA increased port tariffs by 70%, but in some cases between 100% to 500%, according to the Bangladesh Shipping Agents Association.
Adhish Alawani, a Maersk spokesperson, told The Loadstar: “Maersk’s top priority is to keep the cargo flowing in and out of Bangladesh, ensuring that our customers’ supply chains continue to run smoothly and the trade is not disrupted.
“Maersk Bangladesh announced an adjustment to the terminal handling charges following the tariff revision by the CPA, which led to an increase in operational costs. To maintain reliable and efficient service for its customers and avoid disruptions, Maersk has withdrawn this revision.”
Syed Mohammad Arif, chairman of the Bangladesh Shipping Agents’ Association, told The Loadstar that since the port authority had effectively banned surcharges to cover the port fee hike, lines would have to raise freight rates for new contracts.
“The shipping lines can’t pay the additional costs from their own pocket,” he said.
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