Guangdong Shippers Association is calling upon its members to join forces to oppose the possible increase of terminal handling charges (THC) in the future - by as much as 340 percent in some cases - collectively proposed by four shipping associations.

 

The Intra-Asia Discussion Agreement (IADA), the Informal Rate Agreement (IRA), the Informal Red Sea Agreement (IRSA) and the Informal South Asia Agreement (ISAA) recently issued a joint statement saying they will raise THC for cargo to and from South China to recover rising shore costs.

 

The new charges proposed are US$141 per TEU (twenty-foot equivalent unit) and $269 per FEU (forty-foot equivalent unit) for dry freight and US$181 per TEU and US$344 per FEU for reefer cargo, which will be applicable to all South Asia import and export cargo to and from the provinces of Guangdong, Hainan and Yunnan, and the Guangxi Zhuang Autonomous Region.

 

"The Ministry of Communications ruled the rate rise void late last month, much to our happiness," said Cai Gaosheng, chairman of Guangdong Shippers Association. "However, the ruling was based on their improper filing procedure, which means they can modify the procedure and raise the charges again very soon, which is very worrying."

 

The new rates, had they been approved, would take effect from today.

 

Cai said the provincial association has been collecting the opinions of its members and is asking all shippers in Guangdong to reject the rate rise and collect evidence for future litigations and compensation. "Guangdong shippers should be united to protect their interest."

 

He said the irrational THC rise will impose another huge burden on the shippers in Guangdong and stunt the development of Guangdong's foreign trade, which accounts for one-third of the national total.

 

According to Toland Lam, executive chairman of Shenzhen Shippers Association, Shenzhen shippers will have to pay an additional THC of 3.15 billion yuan annually if the rate does go up, resulting in a gain of $404 million for the shipping lines of the four associations in 2007.

 

(China Daily May 15, 2007)