Canadian shippers and freight forwarders have strongly attacked a controversial, mid- May decision by French carrier CMA CGM to impose, effective June 1, an Emergency Low Water Surcharge on all eastbound containers loading at Montreal on St. Lawrence service to all destinations.
"This is the wackiest thing I have ever seen," said Paul Coorsh, Montreal branch manager for Synergex Logistics Corporation. "In recent years, there have been fuel and currency adjustment surcharges by carriers, but it's the first time a steamship line is actually charging for low water."
In a May 13 notice to customers, CMA CGM (Canada) said surcharges of US$40 and US$80 will apply to respectively 20-ftand 40-ftcontainers.
The surcharges appeared to be aimed at offsetting lower revenues with vessels unable to load at full capacity.
Bob Ballantyne, president of the Canadian Industrial Transportation Association (CITA), Canada's largest shipper lobby group, declared: "The shipper community is surprised at this arbitrary action by CMA CGM.
"CITA is the designated shipper representative under the Shipping Conferences Exemption Act and will be looking at the options for shippers under this law," Ballantyne said, adding, "We would hope that CMA CGM, as a first step, would be willing to meet with shipper groups to discuss this unilateral action."
As a result of the recession, notably in 2009, global shipping lines have been cutting vessel capacity on various trade routes, including the Atlantic.
On the other hand, as points out Kevin Doherty, president of Montreal Gateway Terminals Partnership, "A phenomenon we have noticed is that the boxes are heavier."
"It's a commercial decision by CMA CGM in a difficult global shipping environment," said forwarder Chris Gillespie, president of Gillespie-Munro. "It remains to be seen whether other carriers will pick up and do the same."
However, in a notice to customers on May 14, Hapag-Lloyd, a major customer of the Port of Montreal, adopted a more tradi tional approach on the low St. Lawrence water issue that arose due to significantly below average snowfall during the winter and a very dry April. The carrier indicated it was currently revising vessel capacities accordingly and "investigating alternative routings" on transAtlantic services.
If any major carrier, at least provisionally, chooses to bypass Montreal, observers consider there are negative implications for the East Coast's second biggest port for North Atlantic container cargo after New York/ New Jersey.
But in the meantime, Jean-Paul Lejeune, spokesman for the Port of Montreal, reported that container throughput was up 12.3% in tonnage terms in the first four months of this year. "Cost is just one element in the equation -the Port of Montreal is chosen as a North American gateway because it offers competitive and efficient services as well as being strategically located deep inland with excellent intermodal connections to such key markets as the US Midwest."
The average chart datum, or low water level, at the Port of Montreal, is just over 37 feet. Late in May, the chart datum was seven inches lower -which could translate, according to an industry source, into 30 to 50 less containers carried aboard a vessel, depending on weight.