Rate Hike

Jan 29, 2008 (LBO) – A grouping of shipping lines calling at Colombo port have given notice of a sharp increase in freight rates to Europe, citing rising fuel prices and port delays in the region. But exporters have raised doubts whether the 19 container shipping firms, known as the India, Pakistan, Bangladesh, Ceylon (IPBCC) Conference, operating between the Indian subcontinent and Europe, could sustain the higher rates.

The London-based IPBCC has said rates for a 20-foot container will rise by 200 dollars and for a 40-footer by 400 dollars from February 1.

The lines have also warned that further rate increases could be imposed from 1 April and 1 June to offset rising fuel prices and congestion at ports in the sub-continent.

South Asian ports, including Colombo, have seen a surge in cargo owing to India’s trade boom.

On some days the arrival of a large number of ships within a short period forces the vessels to idle while waiting for a berth, raising costs for the lines.

Exporters said the announced freight rate hike is significant and could affect the cost of shipping goods to European markets if the lines go through with the increases.

But they also said they doub