Ocean container shipping lines agreed to place a floor under freight charges for two export cargoes going to Asia – recovered fiber and hay – while raising existing rates on scrap metal. The three commodities have seen an erosion in rates to levels generally less that what it costs a carrier to move an empty container to Asia.
Beginning this December, lines plan to implement minimum rates for recovered fiber in their individual tariffs from all U.S. coasts. Rates will vary by destination. All recovered fiber minimums will be exclusive of applicable documentation fees and certain other charges to specific destinations.
Starting Jan. 1, 20012, ocean lines announced plans to raise metal scrap rates by $100 per 20-foot containers and by $200 per 40-foot container.
Carriers said the downward trend in rate levels has become more difficult in recent months. The result has been greater pressure to ship recovered fiber, scrap metal, hay and other low-rated cargo at levels that make only a partial contribution to the cost of repositioning a container back to Asia to meet equipment demands.
At the same time, cargoes often incur hidden costs, based on the speculative nature of the markets in which these commodities are traded. Containers are frequently held back from loading or delivery and redirected to other ports, requiring extra movement and free-time storage at terminals, as well as added documentation as routing and schedule change.