Global Shipper’s Forum Seeks End to Ocean Cargo Surcharges

Global Shipper Forum (GSF) members have joined forces and announced a plan to put a stop to shipping surcharges.

The ambitious goal to end the imposition of container shipping surcharges within five years has been adopted by the GSF at its Annual Meeting in Colombo, Sri Lanka.

Surcharges are additional and often arbitrary charges applied by some shipping lines and forwarders to the contracted costs of moving freight containers and are a source of intense frustration to their customers (shippers) around the world.

“Shippers of goods around the world have had enough of demands made by carriers and forwarders for the payment of charges that are poorly explained or out of proportion for any service provided,” said Chris Welsh, GSF Secretary General. “We are looking to end the imposition of surcharges on shippers by 2020 through a series of actions that will expose the scale and injustice of the practice to world trade bodies and if necessary publicize the worst examples notified to us.”

Shipping lines and forwarders often threaten to not transport containers if their surcharges have not been paid, putting intolerable pressure on shippers to “pay-up or get left behind.”

The reasons given for applying a surcharge and the scale of charges are growing, but shippers claim they are not related to the true costs of the service being provided.

Examples of surcharges amounting to $250 per container, were given by GSF members using Asia-Europe trade routes. The cost can sometimes exceed the contracted price for shipments making the management of total shipping costs unpredictable for cargo owners.

“Surcharges on a shipment can exceed the contracted cost of transport and are disrupting efficient world trade,” said Welsh. “Our campaign will expose the extent of surcharging and make it an issue in future trading agreements.  At times of subdued economic growth this is damaging to world trade and causing distortions in local markets.”

He added that GSF is determined to end these practices and restore visibility to shipping rates and confidence to shippers. It has set itself the goal of ridding world trade of surcharges by 2020.

A number of supporting actions will be pursued by GSF to achieve this, including making the World Trade Organization and UN bodies aware of the scale and impact of the practice; Seeking amendment to the INCOTERMS compiled by the International Chamber of Commerce to make clear who is responsible for the settlement of certain costs currently recovered through surcharges, and naming and shaming the worst examples of opaque and unjustified surcharges.

In addition to the U.S. and Canada, other members of the GSF include groups representing shippers from Argentina, the United Kingdom, Africa, Australia, New Zealand, Australia, Sri Lanka and Korea.

GSF was formed by the American Association of Exporters and Importers (AAEI) in the U.S., the Asian Shippers’ Association (ASA) and the European Shippers’ Council (ESC) in March 2015.