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ASC RALLIES BEHIND SOUTH CHINA SHIPPERS IN OPPOSING THC

Asian Shippers’ Council Press Release 4th May 2007

ASC views with deep concern the decision of the four intra-Asian rate agreements to jack up Terminal Handling Charges (THCs) for South China. This reveals the total disregard of Intra-Asia Discussion Agreement (IADA), Informal Rate Agreement (IRA), Informal Red Sea Agreement (IRSA) and Informal South Asia Agreement (ISAA) for China’s position on this issue - that THCs are inherently a part of freight cost and cannot be charged separately.

The decision to raise the THC four times the current levels was made without prior consultation with shippers, which goes against the norms of good business practices to keep customers engaged over impending changes, and is required by Chinese regulations.

ASC fully supports China Shippers’ Association’s decision to raise the issue with the Ministry of Communication (MOC) and stands behind Shenzhen Shippers’ Association, Hong Kong Shippers’ Council and Macau Shippers’ Association in opposing the steep THC increase for containers in and out of South China. Failure to take action against the unjustified increases would result in a steep THC hike for South China shippers and a loss of their competitive position.

ASC applauds MOC in its prompt response and in taking a tough stand against the rate agreements for contravening MOC regulations:

  • The ISAA and IRSA have failed to file their constitution agreements with the MOC in accordance with the ‘Maritime Regulation of the People’s Republic of China’. As MOC considers the agreements concluded by ISAA and IRSA in relation to Chinese ports as invalid, their agreements on increasing THC level in South China should be cancelled. They cannot conduct any activities in China within one year, and all their members cannot consult, establish, and implement any ISAA and IRSA’s operation and freight agreements. At the same time, MOC will penalise ISAA, IRSA and their members accordingly, in accordance with Article 48 of the Maritime Rule of China.
  • The IRA and IADA have also failed to file their designated liaison offices with the MOC according to MOC’s Decree No. 10, and their members had submitted incomplete materials on increasing THC levels in South China. Hence the MOC does not accept their filing materials and their members cannot implement IRA and IADA’s agreements to increase the THC level in South China.

At ASC, we have always maintained that the THC is part of freight rate and any suggestion by the four rate agreements that collecting THC is an international practice is a blatant lie. As THC is charged over and above the freight rate, i.e., a double charge, it should be abolished. Instead there should be an all-in freight rate, subject to negotiation between the interested parties.

We recognise that there may be instances when surcharges are justified, in the event of sharp increases in fuel for example. But any surcharge has to be temporary and transparent, based on costs. The THC fails on all three counts

Together with our constituent shippers’ council members in Asia, the ASC will work with the authorities to achieve an all in freight for Asia.

A copy of MOCís Decree No. 10 is attached as reference.

Note to the Editor:

Asian Shippers’ Council (ASC)

The Asian Shippers’ Council covers 5 geographical regions: i.e. China Area, Indian Sub-Continent, North East Asia, Oceania and South East Asia. It consists of 18 shippers’ councils in the Asian region, being those from China, Hong Kong, Macau, Taiwan, Bangladesh, India, Pakistan, Sri Lanka, Korea, Australia, Fiji, New Zealand and Papua New Guinea, Indonesia, Malaysia, Philippines, Singapore and Thailand, and associate shippers’ councils in Africa. It is also the one of the main components to the Global Shippers’ Forum that represents the major trading regions of the world.

For more information contact:

Asian Shippers’ Council
47 Hill Street #07-05
SCCCI Building
Singapore 179365
Tel: (65) 6333-4839
Fax: (65) 6336-3851
Email: [email protected]

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