Shipping firm increases freight rate to Nigeria
Effective next Monday, importers would have to pay more for their cargoes, as shipping firm increases freight rate to Nigerian ports. The rate increase ranges from $1,500; €1,350 to £1,140 or equivalent on all 20 and 40 feet containers.
Specifically, routes analysis showed that consignments from Asia including China, Taiwan, South Korea, Japan, Southeast Asia and Bangladesh; India Subcontinent, and Middle East Gulf; Canada and South America; and from all African ports to Apapa and TinCan, will pay now $1,500 per container, effective January 20th (date of loading).
Also, cargoes from all Europe and Mediterranean ports to Apapa and TinCan, will pay same amount effective same day, while cargoes coming to Apapa and Tincan ports from the United States ports would now pay $1,500 per container effective from February 10th, until further notice.This was contained in the review of Peak Season Surcharge (PSS) freight rate to Nigeria by container shippers, CMA CGM. According to industry practice, carriers charge a Peak Season Surcharge (PSS) when they are at near or full capacity.
The France-based shipper, which announced at the weekend that the freight increases followed the review of PSS on all container types originating from some specific ports across the world to Tin Can Island, and Apapa ports in Lagos, Nigeria.It said the review is to enable it maintain a continued high level of service delivery, as growing demand leads to lack of space for vessels and increasing costs for equipment suppliers. As a result, carriers can implement the Peak Season Surcharge at such a time and at any level until further notice.
In practice, PSS functions like the General Rate Increase (GRI). It is usually announced as an additional fee on top of the base rate, although it may be cancelled or mitigated at a lower rate.The memo obtained by The Guardian revealed that the new rates will affect dry, reefer, out of gauge (OOG), and break bulk cargoes.
In a quick reaction, President, Cross Rivers State Shippers Association, Michael Ogbodo, told The Guardian that the PSS would definitely impose more cost on importers, which would be passed on to the consumers of such imported commodities. He hopes that the charges would be negotiated to a more comfortable level, but will still come with additional burden on importers.He said: “Most of the shipping charges are negotiated by the importers and exporters depending on the volume of imports. We have seen many shippers negotiating with the shipping companies overseas on behalf of their exporters here in Nigeria.
“There is no tariff that is not subjected to negotiation, depending on the volume of import or export. People will have to examine the rate and come up with an agreed negotiated level.”Ogbodo noted that irrespective of the level negotiated, consumers would be made to pay higher, “because when additional amount is being added to your cost and you cannot recover it, then you can pass it on to your final price in the market, and if you cannot, then you bear the cost burden alone.”
In a related development, Danish carrier, Maersk, which plans to increase rates on freight of all kinds from India to Africa, beginning this Thursday, however excludes Nigeria.The increase, which becomes effective from January 16th, affects all cargoes from India to Dar es Salam port.