FEFC warns of shrinking capacity, higher rates

The Far Eastern Freight Conference (FEFC) has adopted a capacity reduction programme in the Asia to northern Europe trade, and is warning of war risk insurance charge increases, reports Schednet.com.

The FEFC says that it will apply an emergency surcharge for cargo on member lines’ through bills of lading dated on or after October 1 in respect of vessels using the Suez Canal. This will be supplemented by an additional emergency surcharge on cargo received or delivered at ports within exclusion zones announced by marine insurers.

The FEFC carriers are also planning to cut capacity on the high volume Asia to northern Europe trade by implementing a “temporary vessel scheduling and co-operation programme” which will operate between October 1, 2001 and March 31, 2002 and allow for voluntary vessel withdrawals by lines, including co-operation arrangements to provide service coverage during this period.

The plan is expected have a significant impact on capacity in the Asia to northern Europe trade, which is 60 per cent controlled by FEFC lines. FEFC lines are APL, CMA CGM, Egyptian International Co., Egyptian Navigation Co., Hapag-Lloyd, HMM, K Line, Maersk Sealand, MISC, MOL, National Shipping Company of Saudi Arabia, NYK, OOCL, P&ON and Yang Ming.