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SCMP Reporter

IN a move to reduce the cost burden suffered by shipping lines due to the yen's appreciation, the Intra-Asia Discussion Agreement (IADA), in conjunction with several Japan-Asia freight conferences, will implement a yen appreciation surcharge (YAS) from Friday.

  Based on quantums of US$30 per TEU (20 ft container) and $45 per FEU (40 ft container), the YAS will be fully implemented by October 15 by all 38 member lines of the IADA.

  YAS is the first currency surcharge the IADA has imposed on members. With its implementation, the conference lines will abolish the currency adjustment factor (CAF) system.

  The YAS is based on the yen to US dollar exchange rate and will be applied on a six-month period to the end of March.

  At the end of the six-month period, the YAS will be evaluated and reset, based on the telegraphic transfer exchange rate of the most recent three months.

  The formula for TEUs is: Yen 120-125 - no YAS; Yen 119.99-115 - $10; Yen 114.99-110 - $20; Yen 109.99-105 - $30; Yen 104.99-100 - $40. The current rate is 109.99-105.

  Comparable rates for FEUs are $15, $30, $45 and $60, respectively.

  The YAS will apply on the following routes: Japan-Taiwan-Japan; Japan-Philippines-Japan; Japan-Thailand-Japan; Japan-Hong Kong-Japan; Japan-Indonesia-Japan and Japan-Vietnam-Cambodia-Japan.

  Shippers will pay the surcharge on a freight pre-paid bill of lading and consignees will pay on a freight collect bill of lading.

  IADA secretary Mark Simon said lines servicing Japan have seen their shore-side Japan costs increase by 16 per cent.

  The yen has strengthened from 125 to the US dollar in December to 105 now, raising the yen costs in Japan by 16 per cent.

  The surcharge is being implemented following consultations with the Japan Shippers' Council (JSC).

  During these consultations, JAS first held that it could not accept the introduction of the YAS as it would disrupt trade because some of the conference lines used different basic currency rates for the break-bulk and LCL (less than container load) cargo.

  However, as a transitional measure in the direction of total abolition of the CAF system, JSC demanded that the lines accept certain conditions.

  These included:    Total exclusion of the existing CAF system from the freight tariff as of January 1, 1994.

   Preparation and announcement of a new per-tonne freight tariff for conventional break-bulk cargo by December.

   Consultations to be held from time to time on formulas that will influence the general rate increases and other freight systems under the YAS.

  The JSC also demanded that the other parties report, as before, on the currency portions (the yen portion against the dollar) even after the abolition of the CAF system.



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