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More news on THC

Two Hong Kong terminal operators, Hongkong International Terminals and Modern Terminals have openly told the press and shareholders over the past few years that their charges have fallen by 30%, claimed Ho. ‘If the THCs is really just a cost recovery exercise, shipping lines should also lower their charges in this case,’ he said. Ironically, Ho said, that a law had been passed in Sri Lanka last year that would only allow for carriers charging THCs to cover their costs. However, ‘the lines threatened to omit Sri Lanka from their service rotations if the law was enforced,’ said Ho.

Hong Kong Shippers’ Council (HKSC) executive director Sunny Ho revealed serious defects in the Transpacific Stabilization Agreement’s (TSA) terminal handling charges (THCs) component list today.

Ho said that the lines have always maintained that THCs are a ‘cost recovery’ exercise, but certain items on the new list apparently contradict this view. He pointed to four key elements, the most important of which was the empty handling component, but it also included drayage to outside depots, storage at those depots and administration costs. ‘We won’t agree to an empty handling charge, this is already included in the freight and so that would be double charging,’ said Ho.

The HKSC will meet with the TSA next week to further discuss elements of the components list that shippers still regard as unsatisfactory. Ho Said he will also meet with Dr CC Chan from Wan Hai, the new chairman of the Intra Asia Discussion Agreement, with THCs likely to be high on the agenda. Shippers have tried to get Pacific carriers to give a breakdown of the THCs since the Far Eastern Freight Conference (FEFC), composed of essentially the same lines as the TSA, produced a similar document in 1990, according to Ho. He also said that, ‘increases in charges between 1991 and 1998 stood at 340%, they were always double-digit, even during the period when Hong Kong was suffering from deflation’, and he added charges were substantially higher than costs.

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