TWRA to raise currency surcharge

PUBLISHED : Friday, 27 November, 1998, 12:00am
UPDATED : Friday, 27 November, 1998, 12:00am

The Transpacific Westbound Rate Agreement (TWRA) is to increase its currency adjustment factor (CAF) surcharges on Japan and Taiwan cargo by 1 to 6 per cent from January 1.

However, it plans to lower its fuel adjustment factor (FAF) surcharge due to lower exchange rates and marine fuel prices over the past quarter.

TWRA, a rate-making group of seven ocean and intermodal carriers serving the trade between the United States and Asia and South Asia, said its CAF on Japan-bound shipments would increase to 34 per cent from 28 per cent and its CAF on Taiwan-bound cargo to 4 per cent from 3 per cent.

A Singapore CAF is to remain at 9 per cent, while a Korea CAF, which is at zero according to the TWRA calculation formula, will remain suspended in the coming quarter.

'The changes reflect a relative appreciation of the Japanese yen and the new Taiwan dollar since August against the US dollar,' TWRA said.

CAFs are special surcharges, not included in freight rates, that are designed to fluctuate with exchange rates and help offset rising currency costs in Asian destinations whose currencies have appreciated against the US dollar.

The agreement's FAF surcharge will be reduced to US$20 from $40 per 40 ft and 45 ft container and to $16 from $32 per 20 ft container.

Surcharge per vehicle for cars will fall to $10 from $20, for timber to $2 from $4 per 1,000 board feet, and for cargo otherwise stated to $1 from $2 per revenue tonne.

These surcharges are applicable to all shipments carried on TWRA member line vessels from the US to Asia.

The FAF is a surcharge that fluctuates with world marine diesel fuel prices at key trans-Pacific loading points.