Survey and media reports suggest shipping lines are making excess profits for cargo trips from Asia

Mon 21 Jun 2021
Posted by: Noelle McElhatton
Trade News

Shipping companies are being accused of profiteering by customers as they refuse to honour contracts, and add premiums and surcharges.

The Loadstar reports that carrier-customer relationships have deteriorated in the past couple of weeks. Respondents to its survey said carriers were not honouring minimum quantity commitments (MQCs) forcing them to pay higher prices as well as surcharges.

Crippling costs

According to the BBC, container costs are proving crippling, with prices up by more than five times in the past year in some cases.

Staffordshire furniture importer, Peppermill, told the BBC the price it was charged to bring a 40 foot container from China had gone from about £2,000 last year to more than £11,000.

One importer of housewares and giftware predicted shortages of goods and prices going up by as much as 40% ahead of Christmas.

Covid disruption

Price rises have stemmed from disruption in the container shipping industry, following a collapse in demand at the start of the pandemic followed by a period of frenzied catch-up.

As well as congestion at ports and booming demand, the industry has been beset by a shortage of containers in the right places to make shipments.

Recent outbreaks of Covid in China have created further delays at ports, as reported in the IOE&IT Daily Update.

Profits soaring

The situation has led to unprecedented profits for shipping lines, industry analyst Sea Intelligence reports. It found that 11 of the biggest deep-sea carriers made an operating profit of $16.2bn in the first three months of the year, compared with $13.3bn in the second half of last year.

Meanwhile the Ever Given, which blocked the Suez Canal in March, is “grounded again”, reports LBC. This time it’s by compensation claims from the Suez Canal Company.

Egyptian authorities have detained the ship claiming $550m for its release from the canal. A sum of $150m is believed to have been offered.

The ship is moored up with its crew and 18,000 containers in the Great Bitter Lake.