- Carriers changing transport plans and levying surcharges to tackle port congestion arising due to Coronavirus.
- Some are dumping reefers at other ports.
- Insurers are worried over claims as most reefer containers carry perishable items.
With the Coronavirus outbreak causing delays at Ports many carriers are taking the surcharge route to evade congestion, reports Mike Wackett for the Loadstar.
The latest to join this league is the Japanese carrier ONE who has imposed a congestion surcharge on reefer containers destined for major Chinese ports.
Carriers Dumping at Other Ports
Moreover, some carriers are preparing to declare force majeure and leave refrigerated containers at alternative ports.
With the coronavirus outbreak showing no signs of abating in China and still severely restricting landside operations at the ports of Shanghai, Ningbo and Xingang, reefer plug-in points are in extremely short supply, obliging carriers to discharge temperature-controlled boxes at other ports.
Adjusting Transport Plan
ONE has told customers it would apply a surcharge of $1,000 per reefer container, with immediate effect, “to cover additional costs related to the unexpected but necessary arrangement of shipments, and associated plug-in charges and monitoring fees”.
The carrier also said it may need to “adjust the original transport plan”, which could result “in the discharge of reefer containers at an alternative port without prior notice”.
Relay of Reefers
ONE said it would endeavour to arrange relay of the reefer boxes to intended destinations, “subject to reefer plug availability”. However, it would be encouraging customers to consider a change of destination, “especially for time-sensitive cargo such as fresh, chilled commodities”.
Actions Taken by Other Carriers
Israeli carrier Zim and others have also announced immediate surcharges of $1,000, while CMA CGM will surcharge its customers $1,250 per reefer container.
MSC said it was invoking clause 19 of its bill of lading, which potentially gives it the right to leave goods at “any place or port which the carrier may deem safe and convenient”, and to receive full freight with any additional costs incurred for the shipper’s account.
The Loadstar understands that other carriers could follow MSC’s example if the crisis continues.
Insurers Bracing for Claims
Meanwhile, insurers are bracing themselves for claims for spoiled contents in containers stuck on terminals in Asia for several weeks.
One marine cargo insurer source told The Loadstar he expected “an avalanche” of claims following the massive supply chain disruption resulting from the virus outbreak, and that, with the vast growth in reefer imports into China, potential claims “could be massive”.
Reefer Shelf Life Worries
“Unfortunately it is not just about plugging the boxes in,” he said. “A lot of the contents of reefer boxes have a shelf life and the goods will end up being destroyed and a total loss. We know from previous experience that claims can run into tens of thousands of dollars per single unit.”
Indeed, the Swedish Club agreed that damage to reefer container cargo was “both frequent and costly”, and because the cargo was intended for human consumption, “even minor changes in quality may cause authorities to order the complete destruction of the cargo”.
Positive Note
In a more optimistic note, CMA CGM said today that, “subject to further review”, it was planning to resume full operations at its network of offices in China from Monday 2 March.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: The LoadStar
