Hapag Lloyd’s additional pick-up fee for containers may discourage Indian exports: sources

Container carrier Hapag Lloyd’s decision to introduce a pick-up fee to deal with the persistent container shortage in India may discourage exports, market sources said, as container prices have already been rising for at least three months.

“It is pure demand and supply. Since there is a shortage of containers in India, exporters will have to pay whatever charges the carriers ask for. But the company may have to discontinue it after December as demand thins at that time” a freight-forwarder based in India said.

Carriers usually impose pick-up charges when containers are not available at a depot and they arrange for one from another depot or a nearby port, the freight-forwarder added.

Hapag Lloyd announced on Oct. 8 that it will levy an additional fee of Rupees 2,500 per twenty-foot equivalent unit and Rupees 2,000 per forty-foot equivalent unit for export bookings from some locations in North India.

In Central India, a pick-up fee of Rupees 300/FEU will be applicable at Borkhedi, while Rupees 500/TEU and Rupees 500/FEU will be charged at Bhopal, the company said.

At Krishnapatnam in South India, an additional charge of Rupees 800/FEU will be applied.

The charges, which is the result of recent global economic developments and equipment deficit in some locations, will be effective Nov. 7 for the US and Oct. 18 for all other destinations, the carrier said.

Hapag Lloyd has also mandated customers to specify a pick-up date for their cargoes when placing a booking request. This will enable better distribution of equipment and ease the issue of container unavailability, it said.

“No pick-up will be allowed prior to the date requested at the time of booking given that equipment will be planned basis the exact pick-up dates… booking requests received without a positioning date in the proper fields will be automatically rejected going forward.”

These changes will be implemented with immediate effect, but for the next one month, should a booking be missing the pick-up date, it will be defaulted to the estimated time of arrival of 8 days for port origin and ETA of 10 days for Inland Container Depots origins, it said.

Hapag Lloyd had made this announcement following complaints by Indian exporters about losses due to container unavailability and high prices.

India continues to face an acute container shortage as shipping liners remain more inclined towards deploying higher capacity on lucrative long-haul routes.

The lack of container availability in India is hurting the export sector and posing a “serious concern” over meeting delivery commitments to foreign buyers, the Federation of Indian Export Organisations, or FIEO, said on Oct. 7.

“From the last couple of months, despite offering space three to four weeks ahead, shipping lines are shutting out the containers abruptly, [saying] the vessels are full,” FIEO president Sharad Kumar Saraf said.

The export body had also called for the formation of a regulatory body to prevent carriers from making abrupt changes in prices and equipment deployment.
Source: Platts