“This madness must stop” – customers go bankrupt as shipping companies rack up surcharges

Shipping carriers are getting more and more creative with the names of the huge surcharges they charge in addition to the already colossal FAK rates.

The latest to land on the desks of the besieged transpacific shippers is Hapag-Lloyd’s “value-added supplement” of $ 5,000 per 40 feet, from China to the United States and Canada.

The carrier told customers this was due to “extraordinary demand from China and the resulting operational challenges along the transport chain.”

Hapag-Lloyd said the surcharge would be implemented from August 15 and “replace other ad hoc surcharges like SGF” (shipping guarantee fee), which according to The Loadstar records is $ 1,000 per 40 feet on the trade.

“It’s outrageous, of course,” said a European NVOCC contact. “But in fairness to Hapag, at least they tell you. The other lines don’t and we only find out when we try to book, and then it’s a “take it or leave it” choice.

Indeed, some carriers, including Zim, Cosco and ONE, already bill shippers in Asia to the west coast of the United States more than $ 7,000 per 40 feet for so-called value-added products, in addition to their FAK rates.

Additionally, Jon Monroe, of U.S.-based Jon Monroe Consulting, notes that the Israeli carrier also applies a congestion surcharge of $ 5,000 per 40 feet from August 6 for shipments to west coast ports. of Los Angeles and Tacoma.

Meanwhile, today’s Freightos Baltic (FBX) index for Asia to the US west coast actually fell 8% on the week, to $ 5,796 per 40 feet, but it is clear that in many cases shippers pay at least double that figure to secure shipping, despite having signed MQC [minimum quantity commitment] contracts with shipping companies.

For Asia to Northern Europe, the FBX reading rose 7% this week, to $ 13,221 per 40 feet, and several of the other components of the FBX for secondary trading saw strong increases as the carriers were redeploying their capacities elsewhere.

Freightos chief researcher Judah Levine said the 30% rate hike from Europe to the east coast of South America this week was “likely the result of a diversion of capacity to the tracks. of ex-Asia “.

The charging star heard from shippers that carriers on a growing number of trade routes are now ignoring contracts and forcing shippers to accept their exorbitant FAKs and high surcharges.

And there is growing concern that all but the largest companies will not be able to absorb or pass on to their customers these massive increases in transport costs.

“It’s one thing to push smaller volumes and customers into the spot market when it’s $ 1,000, or maybe $ 2,000, higher than the big BCO rate levels, but when it is. is $ 10,000, it has the real possibility of leading some players to bankruptcy, and I think that’s wrong, ”the forwarder contact said.

Another UK-based freight forwarder said two of his customers were forced to initiate a layoff process this week because they could no longer get the product to their business at a sustainable price.

“This madness must stop,” he said, adding that the way some shipping companies have treated their customers was “shameful”.