Shippers call for common strategy: Checking rising freight
By Parvaiz Ishfaq Rana
KARACHI, July 28: Members of the Association of Shippers’ Councils of Bangladesh, India, Pakistan and Sri Lanka (ASCOBIPS) on Thursday stressed the need for evolving a common strategy to face the ever-rising freight charges. Delegates from the member states speaking at the inaugural session of the silver jubilee celebrations of the ASCBIPS were unanimous in their views that most of the shipping lines belonged to developed countries and they dictated their terms and resorted to frequent freight increase which was hurting trade and exports of developing states.
They pointed out that these shipping companies were increasing freight rates and other charges on one pretext or the other and our shippers were helpless in resisting these arbitrary increases. All India Shippers Council (AISC) Secretary Mahesh Y Reddy stressed the need for ensuring an efficient multi-model transport system so that the costs of transportation were kept low to ensure the competitiveness of our exports in the world market.
“As we know the developing countries face a greater challenge in the emerging global market scenario, therefore, we need a common strategy to cope with our problems,” Mr Reddy exhorted. He further said that the ASCOBIPS member states represented 1/5th of the total population of the world and we needed to harness our resources optimally so as to attain honourable and dignified position in new economic order.
The AISC secretary said that the ports and shipping was one of the most important sectors of our countries having a marked impact on development of trade and industry and added that it was need of the hour to adopt the most modern and advance technology in the shipping sector and strive for developing an organic linkage among the member councils through a common strategy.
Mr Reddy said that from Indian context merchandise exports alone had touched $80 billion in the last financial year. However, if we looked at its trade with ASCOBIPS member countries it had been dismally low especially in case of Pakistan.
India’s trade with Pakistan in the last financial year was around $500 million. However, the estimated value of informal trade between the two counties was over $2bn. “But we firmly believe that annual free trade between India and Pakistan could reach $6 billion within a year, if the trade barriers are removed,” he added.
He said this would be a win-win situation for both the countries as it would also help to eliminate informal trade and would also result in lower transit cost, which would mean lower prices for consumers and higher revenues for both the governments.
He said that the silver jubilee celebrations of the ASCOBIPS provided us a unique opportunity to develop a much better understanding of each other and hoped that during Friday’s working session India would propose certain amendments in ASCOBIP’S constitution and also its future action plan.
“We need to strengthen the ASCOBIPS so as to enable it to play a more proactive role in developing a synergy in the shipping industries of this region to ensure a higher level of economic engagements in this part of the world,” he maintained.
Zubair Ahmed Malik, vice-president FPCCI, said that the frequent increase in freight rates and other charges by foreign shipping lines was the weakness of our national shipping companies which did not have sufficient capacity to carry our shippers’ cargo and left us at the mercy of foreign lines.
He suggested that the ASCOBIPS should take the initiative and hold joint meeting with shipping authorities and national shipping lines of its members to find a solution to the problem.
Pakistan Shippers’ Council (PSC) Chairman Abdul Rasheed Janmohammed said that the current scenario in Pakistan was that of a ‘heated’ shipping market as in the rest of the world, thus the freight rates were going up and shipping companies were in a dominant position and less amendable to negotiations.
He further said that on the other hand shippers were not unified enough nor did they have the right leverage to be able to collectively bring the foreign shipping lines in a less adversarial position.
Mr Janmohammed suggested developing a mechanism which could provide a platform for discussion between shippers and shipping lines vis-à-vis freight rates and related charges.
