KARACHI, Jan 14: The India, Pakistan, Bangladesh, Ceylon Conference (IPBCC) lines have reduced war risk insurance surcharge between $25 to $65 per container from Tuesday, on all cargo destined to and from Pakistan.

As a result of this decision all the member shipping lines of IPBCC would now be charging $120 per TEU for Europe with effect from Jan 15, 2002.

However, decision with regard to reduction in War Risk Premium (WRP) for cargo destined to US coats (East and West), which is the largest trading partner of Pakistan having annual trade volume of around $2.43 billion, has not been announced as yet.

Through an advice to exporters, the IPBCC lines’ local representatives have notified that all shipping lines have decided to reduce the war risk surcharge to $120 per 20’ container with effect from Jan 15, 2002.

Besides Europe, the shipping lines have reduced around $25 per container for cargo destined to Far East at $125 and for West Africa by $50 per container at $100 but did not alter the WRP for Latin America, New Zealand, Australia, Gulf and East Africa coasts and stand at $150 per TEU.

On the pretext of Afghan war the world insurance underwriters from Oct 1, 2001, imposed ‘war risk premium’ on hull and engines of vessels destined to and from Middle East region, including Karachi.

In order to recover increased premium all the IPBCC lines operating into and out of Middle East region including Karachi had to levy a ‘War Risk Premium’ of $185 per TEU from Oct 1, 2001. As a result of this a surcharge of $4 to $5 per ton was also imposed on bulk cargo.

This development came at the heel of shipping lines’ decision to enhance their freight rates by $75 per 20 feet container and $150 per 40ft container from Oct 1, 2001.

These two negative developments had a crippling blow to country’s external trade having annual volume of around $20 billion (import-export).

However, exporters continue to argue that the world insurers or shipping lines have no justification whatsoever to impose WRP as Afghan war fought by allied forces.

The two major ports of the country annually handle around 40 million tons of cargo, out of this 25 million tons are handled by Karachi Port and about 15 million tons by Port Qasim.

Similarly, the annual container traffic at Karachi Port stands at around 650,000 TEUs and at Port Qasim at around 200,000 TEUs.