top of page
  • Writer's pictureIDS

Carriers accused of “welching” on newly signed contracts to go after more lucrative business

Carriers are being accused of “welching” on newly signed contracts to go after more lucrative premium business.

The Loadstar has seen evidence that some carriers are refusing to honour the MQCs of new contracts with shippers, forcing them to ship a percentage of their contracted volumes at highly elevated rates, plus premium fees and surcharges.

Indeed, a straw poll of LinkedIn shipper and NVOCC contacts this morning revealed carrier-customer relationships have deteriorated considerably in the past couple of weeks.

One UK-based NVOCC, which also has offices in the US, said carriers were now “dictating the market” from Asia, and “arbitrarily deciding what goes on the shelves”.

He added: “Despite having contracts in place, we are now at a stage where we are asking the shipping line what it would like to charge for shipping the box.”

Another said he “no longer felt like a customer, more like something on the bottom of a shoe”.

And the ‘poor relation’ theme came across often in the responses. The commercial manager of a UK-based global forwarder said: “We are getting a few boxes released under the rates by begging and pleading.”

Meanwhile, this week’s Freightos Baltic Index FBX reading for Asia to North Europe was virtually unchanged, at $11,090 per 40ft, while Mediterranean spot rates were up by 4% to $11,080.

On the transpacific, the US west coast component jumped 8%, to $6,581 per 40ft, while east coast rates were stable at $8,836. Transatlantic rates from North Europe to the US east coast were up another 3%, to $5,193 per 40ft, having spiked 140% in three months.

However, on top of these record high freight rates, carriers are stinging shippers for premium fees of up to $5,000 per box to secure equipment and space on ships.

North European importers are suffering from a broken supply chain and rocketing sea freight charges, but, arguably, US retailers are facing a more serious crisis. Importers are plagued with similar supply chain problems, but compounded by huge consumer demand.

According to the latest report from Blue Alpha Capital, US imports in May at the top ten box ports increased were up 52% on the year before, but a more representative 26% hike on pre-pandemic 2019.

“We need a slowdown in imports to give everyone time to breathe,” said Jon Monroe of US-based Jon Monroe Consultancy. “Everyone is talking about peak season, but to have a peak we need to have a valley. What we have here is a long surge.”

Following the announcement this week by the largest home improvement retailer in the US, Home Depot, to charter its own ship to shuttle back and forth between Asia and the US west coast, Mr Monroe speculated that other retail associations could be considering following suit.

“Rates are up, service is down,” said the consultant, “there are many angry shippers out there, getting frustrated as they continue to pay high rates in spite of the fact that they have contracts that go unfulfilled.”

Source: Theloadstar - Mike Wackett

6 views0 comments


bottom of page