KARACHI, Aug 27: The shipping lines, grouping India, Pakistan, Bangladesh, Ceylon Conference (IPBCC) have increased freight and bunker charges for container cargo destined for western countries from September 1, 2003.
On an average the freight is going to be increased by 25 per cent for westbound container cargo service. The increase is second in a short period of three months. Similarly, the last hike in bunker charges was effected from March 1, 2003.
According to an announcement by IPBCC member carriers, the freight increase is $250 for 20 feet container and $500 for 40 feet container. Taking into account previous charges for container service for Europe the net impact comes to around 25 per cent in freight charges.
Similarly, under bunker adjustment factor the shipping companies have enhanced bunker charges to $90 for 20 feet container and $180 for 40ft container form September 1, 2003.
Shipping sources said that other conference lines operating to Far East and North American ports from South Asia ports have also increased their freight rates for container cargo. However, their official document could not be collected.
Presently on an average freight rates for Europe for 20 feet container stands at $1000 and for 40ft container is at around $1900. With new rates coming into effect from September 1, 2003 the increase will be of around 25 per cent in freight charges.
Though there is no specific reason or justification given by the shipping companies for hiking freight charges except that the decision has been taken under rate restoration and bunker adjustment factor.
Recently the major container shipping lines operating from North America to Asia have announced to increase freight for certain forest products from October 1, 2003.
Some of the IPBCC member shipping lines are: Evergreen Marine Corp, American President Lines, P&O Nedlloyed, Maersk and Lloyd Container Line.
On other hand, exporters have expressed their dismay over the sudden hike in freight charges and said that this was going to directly hit their exports.
The survey and a study being carried out by the State Bank of Pakistan on the cost effectiveness and competitive edge of the exporters in the world market becomes meaningless after such sudden hikes in freight charges, a leading exporter said.
Presently country’s external trade has increased to over $22 billion owing to higher exports of over $11.1 billion registered last fiscal (2002-03). With this the handling of containers by both the Port Qasim and Karachi Port have also considerably increased.
Shipping sources further said that the haulage bill by foreign shipping companies who handle over 95 per cent of country’s import and export trade could now be well over $1.2 billion per annum which is a big drain over country’s foreign exchange reserves.