Shipping Costs

Aug 18, 2009 (LBO) – Sri Lankan shippers face the prospect of an increase in transportation costs to export markets with loss-making global carriers beginning to raise freight rates in an effort to restore profitability. The line, which controls about 15 percent of the global container market, has also announced rate hikes on other trade routes.

“The trading conditions for carriers operating in these markets are still subject to unacceptable rate levels,” Maersk said in its statement.

However, shipping analysts said it remains to be seen to what extent the lines could push up prices at a time when there is an over-supply of tonnage on trade routes and cargo volumes have fallen.

The rate hikes come at a time when exporters are still struggling because of the lower prices and lower demand for their products resulting from global recession.

Shippers have also said it is illogical for shipping lines to ask for higher rates when cargo volumes have slumped and there is excess shipping capacity.

The Asian Shippers’ Council, which met in Colombo last week, denounced attempts by lines to raise rates in the present economic climate, saying it was an anti-competitive practice and an effort to fix prices by