Logistics & Forwarding

Silly season is in full flow at the moment with some of the shipping lines.  Anybody planning to arrange some freight from Asia back to Europe either using us or anybody else should be aware of the large freight increases being imposed by the shipping lines in the form of General Rate Increases (GRI) and Emergency Rate Surcharges (ERS) along with other incidentals such as piracy surcharges and container inspection fees. The end result is that rates have gone up by approach 1000$USD (and more in some cases). Additionally we have not even start to see Peak Rate Surcharges yet (PRS).

If you are wondering why this is happening, well it is  due to the huge losses some of the shipping lines have made due to the constant downward pressure of rates over the past couple of years. Bigger and bigger vessels has resulted in a glut of capacity plus the additional aggressive pricing between the lines. However such a massive hike in rates is just probably going to make people reconsider shipping now and  either look elsewhere or hold off to later and wait till one of the lines to decide to rapidly cut rates to grab market share which will once again result in more losses, probably followed by another rapid rate hike.

So prepare for a roller coaster ride on shipping rates in 2012, it is going to be interesting how it all pans out by year end.

We handle a lot of shipments here where we are just doing the customs brokerage and final delivery for clients who have purchased goods in China and India and allowed the supplier to arrange the freight. They often get a suprise when they find the UK charges are much higher than what was orginally expected and initially despute the charges saying the must be wrong as they where told the freight was only $10. Unfortunately they have fallen into the India/China service trap of the appearance cheap freight due to the way freight forwards have to operate in these countries. As a result the additional freight costs have to be recovered at some point and this is when the China or India Service Fee comes into effect along with higher documentation charges and exchange rate charges.

When arranging the actual shipping from these two countries you are best to arrange the shipment with a local to agent to you whether it would be  us or someone else you know. This way you can get all the charges up front. While the freight costs will appear to be higher, the overall shipment costs will be lower.

What a difference a year makes.  At then end of 2007 we were complaining over the difficulty in getting space on vessels. Now we have no problems. Even with shipping lines mothballing containerships there is still plenty of capacity and as a result freight rates have fallen considerably, this includes the once sky high fuel bunker surcharges. The bunker surcharges have followed the collapse in the oil price over the previous six months. This all means lower freight rates for our customers. It is just a shame that the economy in Europe and the US has gone in the same direction as oil prices. IE down!

With the shipping rush for Christmas 2007 due to start picking up again now we are half way through the year there is a real possibility of a meltdown on the container availability from China back to Europe. Effecting both 20foot and 40foot containers with the main problem being, simply the supply is out stripping demand. Booking times are increasing to 3-4weeks for containers and some lines are unwilling to accept large bookings because they feel they would risk compromising their service quality to the shipper. While rates are in decline for years now they are showing signs of increasing with lines implementing peak rate surcharges and other various surcharges.

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