A 12 per cent hike in ocean freight rates by major shipping lines will be effective from today (Thursday), making international trade costlier for Bangladesh and its export products less competitive in the global markets. Exporters fear loss of market.

The shipping lines of India, Pakistan, Bangladesh and Ceylon Conference (IPBCC) attributed the tariff hike to increased oil prices and extra security measures.

Apparel exporters said the increased freight would push their cost of production up since they have to import raw materials and capital machinery. “The rise in the freight tariff will certainly affect the apparel trade as it will have a negative impact on the prices. We are worried about it”, said President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Tipu Munshi. “It will have a double-edged impact as we import huge apparel inputs and that finished products will be dearer,” he told the FE.

The IPBCC would now charge $150 more for a 20-feet container and $300 for a 40-feet container, it is learnt. A local shipping agent said the freight charge hike will have an ultimate impact on international trade of the country as it will push up the prices of exports in the western market. “Both the government and the exporters should jointly share the burden,” the agent said on condition of anonymity. He said the immediate impact could be felt on export trade as some importers might think twice before placing orders.

The rate hike would mean shipping costs to destinations, including the UK, North continent, Scandinavian, Baltic and the Mediterranean ports are set to shoot up. Textiles, machinery, dyes & chemicals, auto ancillaries and grains are the key commodities being traded between India and European destinations.

The members of IPBCC include national flag carrier the Shipping Corporation of India (SCI), P&O Neddloyd, Malaysian Shipping Corporation Berhad, Maersk Sealand, K Line, Hamburg Sud, Hapag -Lloyd Container Line and Evergreen Marine Corp.

Source: The Financial Express

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