THC Disputes =
Reoccur in=20
Shanghai
By the end of last year, TSA and = CTSA=20 successively announced to rename =A1=B0Shanghai port surcharge = (SPS)=A1=B1 as =A1=B0Terminal=20 Handling Charge (THC)=A1=B1 and change the currency unit from US dollar = to Reminbi=20 yuan, respectively from January 1st and 15th 2010. The action is = strongly=20 protested by China Shippers=A1=AF Association and Shanghai Chamber of = Commerce of=20 Import and Export. The THC disputes reoccurred in Shanghai.
Strong Protests from = Shippers
Both TSA and CTSA stated that = such change is=20 to clarify the nature of Shanghai port surcharge, which is consistent = with other=20 fees charged in oceangoing service. Only the name and currency unit are = altered=20 instead of specific sum, which will be independently decided by=20 carriers.
According to the knowledge of = journalist,=20 all shipping lines departing Shanghai Port collect THC except the US = service,=20 which accounts for about 20% of total port throughput in Shanghai. SPS = is a=20 surcharge collected from foreign consignees. Change from SPS to THC = means the=20 item is deprived from surcharges and will be collected solely from the=20 consignors in China. In fact, the Chinese shippers under FOB term need = not to=20 bear the charge as the third party of transport contract. At present, = about 80%=20 of export goods are shipped under FOB term and such change may cause=20 considerable economic burden to Chinese shippers.
Lin Yun, Deputy Director of = Shipper Member=20 Department of China Shippers=A1=AF Association says in an interview with = our=20 journalist that TSA and CTSA mailed to the association by the end of = last year=20 but =A1=B0with no intention of negotiation=A1=B1. For example, TSA sent = a mail of Notice=20 on Adjustment of Name and Currency Unit of Shanghai Port Surcharge, = which stated=20 that no reply received within 30 days means no intention of negotiation = of the=20 association. Lin points out the mail was signed by a law firm of Beijing = Haitong=20 & Partners, which is the liaison place of TSA and CTSA in China = instead of=20 representative office and thus has no right to directly have dialog with = shippers on behalf of lines association.
Li says that after positive = communication,=20 China Shippers=A1=AF Association and Shanghai Chamber of Commerce of = Import and=20 Export will have face-to-face negotiation with these two organizations = in=20 Shanghai in the middle of January.
Subtle Situation of = Port
Collection of THC on the = American services=20 is also a big challenge to Shanghai Port. The cargo volume accounts for = around=20 20% of total throughput in Shanghai. As the biggest competitor, Ningbo = Port had=20 already started THC collection several years before. As a result, quite = a few=20 cargoes turned to Shanghai Port. If Shanghai follows the same practice, = the=20 portion may go back to Ningbo. In particular, the cargo volume of = America=20 service is crucial for transshipment boxes of Asia-pacific ports and = therefore=20 Shanghai may be confronted with even more intensified = competition.
Some officials of SIPG tell our = journalist=20 that THC is decided by carrier themselves where it is improper for our = port=20 enterprise to get much involved. After all, collection of THC has become = irreversible trend in Shanghai. It is difficult to judge whether part of = shipments will be distributed back to Ningbo because shippers will = generally=20 consider comprehensive elements like customs clearance, route layout, = etc. But=20 he also admits the possible negative influence, =A1=B0Collection of THC = will increase=20 of transport cost of shippers and weaken the competitiveness of export. = It may=20 result in less export volume and have some impact upon the port=20 development.=A1=B1
We have learned from some = freight forwarders=20 that the shippers feel =A1=B0helpless=A1=B1 in shipment. The current = criteria of THC on=20 the America service is about RMB470/TEU and RMB750/FEU.
Pendent THC Disputes
The disputes on THC have lasted = for a long=20 time. At the beginning of 2002, six liner conferences (freight agreement = associations) TSA, WTSA, IADA, FEFC, IRA and AADA collectively charged = THC at=20 ports in South China, which caused disputes between carriers and = shippers. In=20 December 2002, the Ministry of Transport, the National Development and = Reform=20 Commission and the State Administration of Industry and Commerce = organized an=20 investigation panel in accordance with the relevant provisions of the=20 Regulations of PRC on International Maritime Transportation.
Shown in the outcome of = investigation report=20 in April 2006, THC is recognized as part of the freight of international = container liner service; the agreements of liner conference and freight=20 agreement association objectively restrict the right of shipper in free=20 selection of carrier, which hinders the normal pricing competition among = liner=20 companies and is detrimental to some extent to the international = maritime=20 transport market. Before signing freight agreement or any surcharge = agreement=20 relating to Chinese ports, the liner conference and freight negotiation=20 organization should establish effective negotiation mechanism with = shippers or=20 shipper organizations within the Chinese territory.
Both parties were seemingly = happy about the=20 results. The shippers reckoned that since THC as organic component of = freight is=20 recognized by the government, shipping companies have no right to = collect the=20 additional expense. But in the view of carriers, the investigation = report only=20 rejects the collective pricing action instead of THC itself. As a = result,=20 despite of opposition of shippers, THC is still collected at almost all = coastal=20 ports.
Lack of Governing Law
As the governing administration, = the MOT had=20 judged in 2007 that the increase of THC criteria by four freight = agreement=20 organizations in South China was ineffective. It was a kind of = punishment=20 through necessary procedures, but no restriction on the behavior of = raising the=20 THCs was set.
Chinese Anti-monopoly Law was = officially=20 promulgated on August 1st 2008 but it is somehow difficult to apply this = law to=20 shipping circle especially the liner transport market. Prof. Yu = Shicheng, Head=20 of Shanghai Maritime University comments, =A1=B0It is a principle law = and its=20 stipulations are not fully applicable to the actual problems of liner = market. I=20 have been kept appealing that under this governing law, there must be=20 implementing rules or special regulations pertinent to anti-monopoly = issues=20 according to the actual conditions. We hope to see a shipping law as = soon as=20 possible, which is equal to the specific regulations of Anti-monopoly=20 Law.=A1=B1
The maritime law expert Mr. Hu = Zhengliang=20 emphasizes to our journalist, =A1=B0The law is only a channel of market = regulation,=20 which cannot substantially change the nature of market economy, namely = the basic=20 function of resource allocation. But as the socialist economy system is = being=20 improved and the Chinese shipping market economy is dramatically = developing, the=20 regulation function by law should be more reinforced and=20 improved.=A1=B1