CMA-ERCE Emergency Revenue Charge, ERC
Carrier SurchargesKey Information
What is CMA-ERCE?
The Emergency Revenue Charge (ERC), specifically denoted as CMA-ERCE, is a temporary surcharge imposed by the shipping line CMA CGM. This fee is primarily introduced to offset unforeseen operational costs that arise from specific challenges impacting the shipping industry. These challenges could include sudden increases in fuel prices, currency fluctuations, port congestion, or other unexpected disruptions that significantly affect the operational expenditure of the carrier.
The ERC is levied by the shipping company and is typically paid by the freight forwarder or directly by the cargo owner, depending on the contractual arrangements of the shipment. The fee is applicable in scenarios where the shipping line encounters extraordinary costs that cannot be absorbed through standard pricing mechanisms. The charge is usually calculated on a per-container basis, but the exact amount and application criteria can vary depending on the nature of the disruption and the trade lanes affected.
Unlike regular surcharges such as the Bunker Adjustment Factor (BAF) or Currency Adjustment Factor (CAF), which address predictable cost variations, the ERC is specifically designed for sudden and temporary cost recovery. It is crucial for shippers and freight forwarders to closely monitor announcements from CMA CGM regarding when and where the ERC will be applied, as these charges can influence the overall logistics budget.
In practice, stakeholders should ensure they have clear communication with the shipping line or freight forwarding partners to understand the conditions under which the ERC is implemented. Additionally, it is advisable to account for potential ERC fees in budget forecasts and contract negotiations to mitigate any financial impact caused by these unexpected surcharges.
Frequently Asked Questions
The CMA-ERCE fee, or Emergency Revenue Charge, is a temporary surcharge imposed by shipping line CMA CGM. It is designed to offset unforeseen operational costs due to factors like fuel price hikes, currency fluctuations, or port congestion. This surcharge helps maintain service levels during unexpected disruptions.
The CMA-ERCE charge is imposed by shipping carriers, specifically by CMA CGM, and is paid by the shipper. This surcharge is applied to each container to recover sudden operational cost increases affecting the carrier's operations.
The CMA-ERCE fee is calculated on a per-container basis. The specific amount may vary depending on the extent of unforeseen costs the carrier faces, such as fuel price increases or port congestion, impacting overall operational expenditures.
Avoiding the CMA-ERCE fee can be challenging, as it addresses unexpected operational costs. However, staying informed about market conditions and negotiating contracts can help. The fee is applied when unforeseen circumstances like fuel price surges or currency fluctuations arise.