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Territory THCs to rise from April 1

THE Intra-Asia Discussion Agreement (IADA) is to increase the Hongkong terminal handling charges (THCs) from April 1 to meet cost recovery, says IADA secretariat spokesman Mark Simon.

He said the decision, which was made by the group's members in Japan recently, involved increasing the THC to $1,000 per 20 ft equivalent unit (TEU) and $1,500 per 40 ft equivalent units (FEU) and $40 per revenue tonne.

The THC increase was to recover land-site cost in Hongkong, he added.

He explained that the group was using cost-recovery principle as adopted by the Asia North America Eastbound Rate Agreement and the Transpacific Westbound Rate Agreement.

''If we see an increase in charges for terminals and stevedores, we pass the cost on to our customers,'' Mr Simon said, adding that the group tried to enable each line to recover as much of its cost as possible.

He said IADA believed that its land-site cost recovery scheme was practical and was at an acceptable level with other conferences in the world.

Mr Simon said the group did not want to arbitrarily increase its THCs and was gathering data to support its case. It would make public the information in 12 to 18 months.

He claimed the members were lagging between $1,000 and $2,000 in cost recovery.

Asked why there was a hefty $16 increase from the current $24 per revenue tonne, Mr Simon blamed rising stevedoring costs involving less-than-container-load cargo for the increase and also claimed that full cost recovery would bring the rate up to $70 per revenue tonne.

He said the IADA would meet the Hongkong Shippers Council to explain the reasons for the charges.

The last THC increase in Hongkong was in July last year.