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Rate-setting body’s demise sends freight costs tumbling
Shippers whose cargo is exported from Vietnam to Europe are benefiting from attractive freight rates an surcharges after a collective rat setting body covering Asia-Euro trade closed last Friday.
The Far Eastern Freight Conferee (FEFC), established in 1879, used to a as a forum for discussions on ocean freight rates and other fees such bunker and currency surcharge between 17 carriers and the published common tariffs.
The FEFC was outlawed fro October 17 following the application of European Union (EU) competitive law under which container shipping lines calling at European ports are banned from pricing discussions.
At the time of its demise, the FEFC’s rate for shipments from Vietnam Europe had been US$766 per TEU (Twenty-foot Equivalent Unit) in Bunker Adjustment Factor (BAF) plus 17.9 percent for Currency Adjustment Factor (CAF).
Subsequently, shipping operators, who have become more independent, lowered their surcharges.
The Denmark-based Maersk Line now charges $720 per TEU plus 14 percent.
France-based CMA is offering $717 plus 14.79 percent, and Germany-based Hapag Lloyd’s $712 plus 17.7 percent.
An executive of a major Taiwanese shipping line, who wished to remain unnamed, said the closure of the FEFC marks a new era for carriers since they now make their own decisions on charges.
Freight rates entering Europe from Vietnam have sunk by around 40 percent since late March, the executive said. Transporting 1 TEU to major European ports now costs $400 to $500 to against $900 earlier.
An executive of the Chile-based CSAV said there had not been much growth in volume of cargo even during this peak export season – which begins in October – to explain why shipping lines have steeply dropped charges.
Oliver Nguyen of furniture manufacturer and exporter Eurofar’s representative office in Ho Chi Minh City, said the closure of the FEFC opened opportunities for exporters, importers, and logistics companies to benefit from competitive freight charges as they can negotiate the charges with each carrier.
According to the Journal of Commerce Online based in the US, not only the FEFC but also all other liner shipping conferences in Europe have been outlawed from October 17.
It says carriers will be allowed to exchange data, a task that will be handled by the Brussels-based European Liner Affairs Association.
The EU still allows carriers to cooperate through vessel-sharing and slot exchange agreements and other pacts that benefit shippers as long as they do not collude on prices, the newswire says.
Thanhnien
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