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Extra shipping costs hit importers

Commerce Commission watching developments in the shipping industry as charges climb in the wake of health crisis.
Posted on 23 December, 2020
Extra shipping costs hit importers

Congestion charges and increasing freight rates are causing headaches for importers, who fear shipping lines are profiteering from the Covid-19 pandemic.

International shipping lines have recently been imposing congestion fees of between US$400 (NZ$565) and US$600 on each container delivered to make up for costly delays at ports worldwide, including Auckland.

Shipping rates, which had largely been in decline for years, are also increasing sharply as ocean freight exceeds pandemic expectations.

At the same time those companies are posting their healthiest profits in years, prompting concerns from industry figures the health crisis is being used as a mechanism for gain.

The extra costs and delays from the overburdened shipping industry means many importers and retailers are struggling.

The NBR reports at least one industry participant has engaged with government and the Commerce Commission about shipping line behaviour.

A commission spokesman says it is monitoring developments in the shipping industry and was aware of concerns about shipping rates and congestion charges, but it wasn’t looking at this under the Commerce Act.

Overseas, the European Shippers’ Council has accused ocean carriers of profiteering and the American Federal Maritime Commission is investigating shipping liner alliances and container availability.

South Korea has warned shipping lines any contract violation or unilateral change in contract terms would be scrutinised and punished if necessary.

The Importers Institute says shipping lines are levying congestion surcharges but they are also encountering heavy costs around the delays that need to be recovered.