THE CURRENT meetings between the shipping lines (in the form of the Container Line Operators Forum) and Portnet over compensation for extra costs incurred due to the Cosmos chaos in Durban are critical.
If the lines are not promised compensation then the lost cash has to come from somewhere. And that somewhere will be the lines' users and - ultimately - the end consumer.
The suggestion from the lines is that - if the meetings fail to reach a satisfactory commercial agreement - then they would be forced to get some part of the compensation from a congestion surcharge.
While no names are being made available at this sensitive period of the negotiations, the following summary of feelings in the industry come from shipping line sources contacted by FTW.
The compensation-from-Portnet issue is a new factor in SA where, previously, port delays were considered an operational hazard. What is prompting the compensation call?
It would appear that shipping lines would certainly prefer to find some solution that avoids adding to the end cost of the shipment. In many other parts of the maritime world, a shipping line is often able to divert to another, independently-operated port. But, in SA, all the ports fall under the control of Portnet - and line executives feel that there are no viable alternative ports for the ships and cargoes in question. Any diversion to alternative ports under the current circumstances is costing them extra.
On a surcharge, the freight market, excluding the lines, always questions what they see as a form of price-fixing collusion - with all the lines imposing the same surcharge.
The lines have differing freight rates, say FTW shipping sources, and customers are free to choose the sea carrier that suits their needs. However, congestion problems are common to all the lines, and it is considered to be fair to all to go for a common surcharge.
But the penny-conscious in the market go on to suggest that individual freight rate increases would allow for compensation, but still allow price-competition between the lines.
But the lines' logic is that - when additional charges are unavoidable for a specific reason - it is seen to be better to introduce a specific congestion surcharge. This, according to the lines, can be dropped immediately the problem is solved. There could be resistance to reducing the freight rates (which are already insufferably low, according to the lines) under the same conditions.
If Portnet fails to come to an agreement, and refuses to consider the option of line compensation, there are no alternative, independent ports - and the next step is very likely to have to be the surcharge.
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