- International shipping lines have implemented a new Overweight Surcharge (OWS) from February 7, creating concerns among shippers in Cochin Port.
- The surcharge targets dry cargo containers exceeding 18 tonnes, imposing a fixed rate of $250 per 20 ft dry container.
- Shippers now face the dilemma of either paying the surcharge or reducing the weight per container, with the situation expected to persist for the next few months.
- The implementation is linked to the current challenges in the Red Sea, leading to re-routing of transit schedules and an escalation in freight rates.
Introduction of Overweight Surcharge Raises Concerns in Cochin Port
The Cochin Port shipping community is grappling with uncertainties following the recent decision by international shipping lines to introduce a new Overweight Surcharge (OWS) effective February 7. The surcharge is specifically targeted at dry cargo containers with a gross weight exceeding 18 tonnes, imposing a fixed rate of $250 per 20 ft dry container.
Shippers Navigate Dilemma Amid Limited Options
Shippers in Cochin Port find themselves in a challenging situation, forced to choose between absorbing the newly imposed OWS or adjusting the weight per container to meet the shipping line’s specifications. This dilemma adds complexity to cargo handling operations and is expected to persist for the coming months, impacting the efficiency of trade in the region.
Red Sea Challenges and Freight Rate Escalation Prompt OWS Implementation
The decision to introduce the OWS is closely tied to the ongoing challenges in the Red Sea. Shipping lines have rerouted transit schedules through the Cape of Good Hope due to the current situation, resulting in an extended voyage duration. In response to longer transit times, major shipping lines have escalated freight rates to cover additional costs, impacting the export sector already facing challenges from space constraints.
Cochin Port’s Balancing Act in the Face of Tonnage Policy
While the implementation of the OWS poses concerns for shippers in Cochin Port, there is an acknowledgment of the need for a delicate balancing act. Tonnage matters significantly, especially for ships undertaking long-haul voyages to regions like Europe and the US. The challenge lies in finding equilibrium between additional tonnage costs and maintaining competitiveness in the market. Cochin Port, handling a substantial amount of export cargo, anticipates minimal impact on shippers, particularly with the fixed $250 surcharge, especially as freight rates are projected to trend downward.
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Source: Business Line
