THE Hong Kong Shippers' Council (HKSC) has lodged a strong objection to the proposed 20 per cent increase in terminal handling charge (THC) by the Intra-Asia Discussion Agreement (IADA).
In a letter to the IADA secretariat in Hong Kong, HKSC executive director Clement Yeung said the proposed 'hefty increase' was not justified and also was not in accordance with the undertaking given by the IADA to the council in July last year.
The THC was revised to $1,000 per TEU (20 ft equivalent unit) and $1,500 per FEU (40 ft equivalent unit) on August 1 last year.
According to the HKSC, before implementing those revisions, the IADA had agreed 'in the interest of trade stability' that the Hong Kong CPI (consumer price index) and GDP (gross domestic product) deflator 'will serve as inflationary guides for future THC increases', which would be subject to talks with the HKSC.
With the proposed THC levels taking effect in January, the HKSC is looking at a reference period of 17 months.
According to HKSC calculations, the estimated CPI A index inflation rate for the period was 11.76 per cent.
Calculations on how this figure was arrived at also have been sent to the IADA secretariat.