Ship owners hope to get just rewards
THE Hong Kong shipping community has welcomed the initiatives of China Ocean Shipping Co (COSCO) and Sinotrans in tackling the problem of overdue freight payments in China.
That is because some of the money owed to COSCO and Sinotrans is, in turn, owed to foreign shipping companies, including those based in Hong Kong.
Hong Kong companies have, for many years, experienced difficulties in collecting payment for freight in China.
Some shipping lines report situations where payments are outstanding for more than a year. Some small freight forwarders have been bankrupted.
Shipping lines also experience difficulties when payments eventually arrive for multiple shipments.
Quite often, these payments do not add up to the outstanding total and carriers are left with the task of figuring out which shipments are outstanding and which have been paid for.
Shipping companies have reviewed this issue several times, but have been able to do little because they have had to deal with state-owned enterprises and shipping agents.
Since COSCO and Sinotrans sought the help of foreign shipping companies in confronting the problem in August, the Hong Kong Liner Shipping Association has been reviewing the overall situation concerning payment of freight for cargo originating in China.
The extent of the problem can be gauged from the fact that more than 50 senior executives of Hong Kong and foreign shipping companies jammed the conference room of Commercial Management to hear the proposals forwarded by COSCO and Penavico in August.
So strong was the interest in that preliminary meeting that some companies flew in their managers from Shanghai and Beijing at short notice.
A committee, organised under the sponsorship of the association, has met several times to discuss standards of practice for all segments of the industry.
The next steps in the process will be to implement the accepted standards and to educate all parties involved in the mainland shipping sector.
Although the difficulties experienced over the past several years will not be resolved overnight, members of the shipping community remain optimistic that measures are being taken that will curb unacceptable practices.
It is heartening to look forward to the emergence, at last, of a new standard of practice in a notoriously secretive industry.