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Ocean Freight Rates Still Rising18 Jan

As one year ends and another begins  you may be forgiven to believing or hoping that maybe this year things will change. After all where would we be without hope. However we hate to dash the optimism but in  the shipping industry one thing doesn’t seem to be changing and that’s the shipping lines policies of launching a raft of further increases under many different guises on to the exporting and importing community. GRI’s, BAF and CAF increases, peak day collection surcharges etc  abound along with the rolling over of traffic due to space shortages and the cynic would suspect better paying traffics becoming available.

Now if we are  honest ourselves we all  understand and respect the need to trade profitably. Profit  isn’t a dirty word. Maintaining viability and profit levels funds new services, vessels and maintains service levels.

From comments we have received what appears to rankle most of our readers is the notion that the Lines were so busy fighting each other to maintain their own volumes and win new traffic flows that they lost all sight of what was  financially viable -sort of shipping line equivalent of irresponsible banker lending which caused the economic meltdown in the first place.

Most experienced operators in the shipping world knew rates were reducing to untenable levels. However no-one was going to look a gift horse in the mouth and most took advantage of the lower rates in order to satisfy their clients and to  maintain their own volumes and their market share.

So whose fault is it – the lines for offering uneconomical rates - the agents for taking advantage and at times exploiting the situation more under guise of working in their client’s best interests or a combination of both?The arguments are very complex and for obvious reasons vary depending on what side of the fence you sit. 

What is certain is the situation is not going to resolve itself overnight. However it is apparent from comments posted to us that whilst importers and exporters alike are trying appreciate the situation, their patience is being stretched by the constant drip of these additional charges. No-one can build customer confidence and long term relationships when month by month prices are escalating.  As one client put it to us “if I’ve got to pay more then say so – ONCE  – I’d rather one hefty increase rather then this consistant  spiralling we are getting now.”

We would be interested to hear what our readers think.

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