SA shippers submit to lines' war risk surcharges

... as international shippers take a stand, writes Alan Peat THE WAR risk insurance surcharges being levied by shipping lines (some as high as 25% of the current freight rate to the affected areas) have raised serious objections from international shippers. The basic query is: How did the lines extrapolate the increases in hull and cargo risk insurance to the end surcharges faced by the shippers? Indeed, in one case, the Dutch shippers association, Evo, advised its members not to accept any war risk surcharges imposed by the shipping companies until "a transparent cost calculation for the surcharges" is produced. And the body's protests - and refusal to pay - might very well have had one positive result so far. Evo targeted the surcharges laid down by a number of the shipping line "conferences" in one of its public statements, accusing them of "continuing abuse of the international situation by imposing war risk surcharges". And, only days later, one of those named by Evo made a major cut to one of its set of surcharges - although not acknowledging that the Evo action had triggered the change. Member lines of the Europe/Mediterranean Trade Agreement (EMTA) slashed their war risk surcharge for Egyptian, Syrian and Lebanese ports by 50% - from US$250 per TEU (twenty foot equivalent unit) to $125 per TEU. EMTA carriers are Armada, AWS (Ellerman), CMA CGM, Contazline, Hamburg Sud, K Line, Maersk Sealand, Mediterranean Shipping Co., Navigation Maritime Bulgare, P&ON, Safmarine and Senator Lines. The revised surcharge came into effect on October 8. The reduction was a result, said EMTA, of "substantial efforts by member lines in discussion with insurance underwriters". Although the SA Shippers Council (SASC) is also questioning how the surcharges are calculated, they are not at present considering a refusal to pay as part of their strategy, according to executive director, Nolene Lossau. "But we would certainly like to have some transparency from the lines, to see how these surcharges are calculated." This extra cost puts undue pressure on shippers, Lossau added, who are already faced with an incipient global recession. "The cargo owners are getting hit from all sides. Markets in decline, volumes falling, profits going down. Altogether tight times, and worse in the offing." SASC is currently waiting for some response from the shipping lines.