JOC 5/11/07

The Far Eastern Freight Conference announced it will levy a surcharge of $145 per twenty-foot container for all cargo moving through United Kingdom ports from Asia as of December to recoup extra costs resulting from congestion on the waterfront and at inland depots.
         
The 16-member group also expressed "deep concern" that ports in Northern Europe and the Mediterranean face increased congestion over the next two years as they struggle to cope with continued high growth rates in container traffic from Asia.
              
The move by the FEFC, which accounts for over two-thirds of the Europe-Asia trade, follows repeated warnings by carriers and shippers that Europe's drum-tight supply chain is vulnerable to levels of congestion last seen in the summer of 2004 which snarled container shipping across the Le Havre-Hamburg port range.
              
The FEFC said its carriers had boosted cargo volume from Asia to the UK by 15 percent in the first eight months of 2007 compared with the year-earlier period when ports were experiencing "substantial" growth in other trades.
"This has created congestion not only at the major UK terminals, but has also caused congestion of the inland transport and delivery systems," the UK-based group said.
Member lines have been forced to bypass British ports and feed cargo to the UK from continental Europe. In some cases, carriers have diverted vessels to non-scheduled ports and equalized the costs for these ports.
        
"This has created even more congestion for an infrastructure that is already over loaded," the conference said. This has also made it very difficult to repatriate empty containers to Asia. The surcharge will be reviewed after 60 days.

The FEFC said that while the UK is the most immediate problem for its member lines, the possibility of increased congestion in both Northern Europe and the Mediterranean " will become worse, as the continued high growth rates expected in 2008 and 2009 will add ever increasing volumes of containers to the already overloaded infrastructure throughout Europe."

Asia-Europe traffic is running around 20 percent above 2006 levels, while volume through Mediterranean main ports and transshipment hubs increased by nearly 25 percent in the third quarter of the year.