Maersk, CMA-CGM to slash surcharges in China by up to 50 per cent to boost traffic

Insiders sceptical 50 per cent reduction in surcharges will lift traffic

PUBLISHED : Thursday, 05 November, 2015, 12:14am
UPDATED : Thursday, 05 November, 2015, 12:14am

Shipping giants including Maersk and CMA-CGM are slashing surcharges in China from this month by up to 50 per cent to boost traffic, but industry insiders doubt it will make any difference to dwindling trade.

The cuts follow the Ministry of Transport's decision last month to compel shipping lines to end arbitrary surcharges to give relief to Chinese importers and exporters, especially in the pre-Christmas peak season.

Surcharges, different from freight rates, are collected on land for various purposes such as customs clearance and documentation. They are usually steep, non-transparent, and often allegedly unnecessary.

According to the China Shipper's Association, shipping companies today impose more than 20 kinds of surcharges in the country.

So far, 11 international and domestic shipping companies have announced reductions in surcharges.

Maersk Line, the world's largest container shipping company, has cancelled its certificate fee (450 yuan per bill) and customs clearance fee (250 yuan per bill) as well as reduced all other surcharges, including electronic cargo release, which has been cut to 190 yuan per bill from 450 yuan per bill.

But freight forwarders are hardly excited.

"We are yet to see any difference" said a shipping forwarding representative from Beijing-based W-Best International Freight, who did not want to be identified.

"I just paid a document amendment fee for Cosco (China Ocean Shipping Group). The charge remains the same."

Shen Jie, a representative at Shanghai Tianming International Freight, echoed the view and added the net gain is minimal as reductions vary from company to company. "On average, the saving is only about 10 per cent compared with the current surcharge payments."

Total surcharges in general amount to 2,000 to 3,000 yuan per container in China. With the market in a downturn, many shipping companies have already cut freight rates sharply, which can result in more savings than surcharges.

"Factories are under a lot of pressure as surcharges have jumped more than 50 per cent in the past three to four years, becoming their biggest shipping cost," Shen said. He pointed out that sending a container from Shanghai to Southeast Asia now costs only US$50, which is less than a sixth of the related surcharges.

"We are hoping for a bigger cut. I can't see any increase in shipping orders as a result of the current cuts," Shen added.

Trade has taken a hit as the mainland economy slows, with exports falling 1.8 per cent and imports down 15.1 per cent in the first nine months of the year.

"We welcome surcharge reductions but I don't think it can help our business. The economy is far from good and demand for commodities such as coal and steel are too weak," said the W-Best shipping forwarding representative.