Japan shippers object to THCs

THE Japan Shippers' Council (JSC) has formally written to the Trans-Pacific Freight Conference of Japan (TPFC) and the Japan-Atlantic and Gulf Freight Conference (JAG) objecting to the plan to introduce terminal handling charges (THCs) at Japanese ports in January.

The JSC has pointed out that the conference tariff rule for rates for containerised freight is based on container yard to container yard for full container load (FCL) and container freight station to container freight station for less-than-container loads (LCL).

It also noted that for the more than 25 years since container transport was introduced by conference carriers, Japanese shippers have been paying freight charges for containerised cargo in accordance with the conference tariff rule which had been filed with the US Federal Maritime Commission.

It said the Japanese shippers were surprised to hear from the conferences that the present freight rates covered the portion of carriage only, and carriers were not compensated for operation from container yards or freight stations.

The JSC said it could not accept the explanation that the conferences had overlooked implementing THCs in the past and that it had been a special favour to Japanese shippers.

The council pointed out that the conferences had never notified shippers that a gap existed between carriers' liability and compensation on yard-to-yard operations.

It said the established custom in the trade was that shippers paid freight charges and carriers rendered service on a yard-to-yard basis.

As a result, the JSC felt that actual cost increases in container yard operation should be reflected in the base rate and treated in accordance with the usual general rate increase consultation procedures, and not through a THC.

The council said the joint action of carriers using THCs to increase compensation for transportation services instead of through general rate increases would violate Japanese law.