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Cost Recovery Surcharge / 16.08.2010 As we previously have touched upon, market developments in recent months have lead to an increased demand in the time charter market, which has caused time charter rates to rise with more than 50%. This development is expected to continue in the coming months, and it is accompanied by a number of challenges which put additional pressure on operating costs. The vessel shortage, which particularly concerns Unifeeder’s core vessel segment with a capacity of 800 TEU or more, has made it progressively more challenging to engage in short term charter agreements. This has made schedule recovery and contingencies difficult. Moreover, the sudden rise in trade volume has caused an increasing imbalance between import and export cargo. This has caused congestion in key ports, which has lead to delays and increased bunker costs as delays do not allow the vessels to apply economic speed. Consequently, Unifeeder is forced to implement a Cost Recovery Surcharge on all cargo to and from the continental base ports and Scandinavia, the Baltic States, Poland and Russia. The Cost Recovery Surcharge of EUR 25/TEU is in effect as from September 1 2010 We regret being forced to seek partial cost recovery from our customers in line with recovery efforts done in the larger trades, however it is a necessary means to maintaining the high level of flexibility and service which we always strive to deliver. Unifeeder A/S Market developments / 20.07.2010 Over the past few months the shipping industry, hereunder the feeder market, has faced radical changes in relation to increased volumes and demands. As of yet it is hard to say whether the positive tendency is an indication of a recovering market, or if it is merely an outcome of changing seasonal activities. While the overall tendency is positive, the development has also started to cause strain on capacities and subsequently increasing the pressure on costs. The sudden increase in trade volumes has lead to a higher level of imbalance between import and export cargo along with accompanying congestion in some important ports. This in turn has lead to increased bunker costs as the circumstances, e.g. delays in ports and the necessity to utilise capacities at hand, do not allow time for economic speed of the vessels. Moreover, due to an increased demand for ships in the charter market in the past months, time charter rates have risen significantly (almost all relevant feeder charter index’s are up with about 50% within just 2 months). The limited availability has naturally made it ever more challenging to engage in short term charter agreements and consequently made schedule recovery and contingencies difficult. These challenges and demands have affected the industry as a whole, and if it continues it will lead to further cost increases. Thus, as we have not evaded the impact, we see ourselves forced to also seeking cost recovery from our customers in line with recovery efforts done in the larger trades and we will revert in due course with more details. As this demanding situation challenges us all, we hope for understanding to this decision, which is a necessary means to maintaining the high level of flexibility and service which we always strive to deliver. Unifeeder A/S Continuous delays in Rotterdam / 16.07.2010 As mentioned in our previous newsletter, serious operational problems and delays at the Euromax, ECT Home and ECT Delta terminals in Rotterdam these past three weeks have caused both delays and short-shipments of cargo to and from the Baltic and Scandinavian countries.The situation, which is caused by a lack of manpower and increased volumes, combined with delayed ocean liners, is causing peaks at terminals exceeding their capacity. Consequently, we are experiencing delays beyond 36 hours as well as short-shipments on our Scandinavian and Baltic services, and the performance of the terminals has prevented us from maintaining our planned schedule, in spite of an immense effort on our part to always provide excellent service. Accordingly, we have experienced a loss of revenue and we have been facing additional operational costs as a result of our vessels laying idle in Rotterdam for a longer period of time, extra fuel consumption and overtime costs in the wayports. As these challenges are caused by external factors of which Unifeeder has no control, we cannot absorb the extra costs for feeder vessels arising from this unfortunate situation. Consequently, if this situation continues during the next weeks we will implement a congestion surcharge as from 1 August. Please contact your local Unifeeder office to keep you updated on how the delays affect our various services. Unifeeder A/S |