KARACHI, Aug 31: Member shipping companies of India, Pakistan, Bangladesh and Ceylon Conference (IPBCC) Lines have enhanced their freight charges by 18 per cent for containerised cargo destined for European countries.

The shipping companies have made this increase under rate restoration efforts for all containerised cargo and will be effective from September 1, 2006.

As per the business plan for 2006, the IPBCC member lines have intimated to their customers that they have agreed to implement a rate restoration in the westbound trade.

Consequently, exporters will have to pay 18 per cent more in freight to the IPBCC member shipping lines for all containerised cargo for European Union (EU) member states.

According to the exporters, presently they are paying $1,100 for a 20-feet container and $2,200 for a 40-feet box destined for EU member states. The IPBCC member shipping lines have enhanced freight charges by $200 for a 20-ft box and $400 for a 40-ft box.

However, the shipping lines have announced that these upward revised freight charges would be valid up to December 31, 2006 only. This indicates that after this date there may be further increase in freight charges by the IPBCC members.

Giving reason for freight hike the IPBCC members stated that they had been facing considerable increase in costs, and delays as well as congestion at ports, which have a detrimental effect on their vessels’ ability to operate efficiently.

In its announcement the IPBCC Conference Line made it clear that the member shipping lines would keep ancillary tariff items, such as special equipment additional charge and other surcharges, under constant review during this period. This means that they have the right to enhance these tariffs at any stage.

Exporters reacting against the IPBCC decision said that the freight hike to the EU countries will be a blow to exports and imports because Europe is the biggest trading partner of Pakistan and a substantial volume of trade is carried between them.

They further complained that the major shipping lines have shifted their operational offices to India and this has further enhanced their cost of doing business.

“It takes eight days to get shipping documents, such as bill of lading, processed as most of the leading shipping companies first shifted their offices to China and after facing language problem moved to India,” lamented a leading exporter.

“Our external trade will be further adversely affected with the hike in freight and the textile industry, which is already passing through its most difficult times, is bound to get hurt more,” another exporter said.

Export figures released by the government for the month of July have already shown a major fall in exports of some leading textile and clothing items as against the corresponding period of last year.