Volatile Voyage

Feb 19, 2010 (LBO) – Sri Lankan shippers facing rapidly rising freight rates are advised to try to negotiate long-term contracts with shipping lines, an industry official said. Increasing freight rates are a problem for us,” said Gehan Kuruppu, vice president of the Sri Lanka Shippers’ Council.

Now rates are not holding even for one month. The rate quoted in January is not available in February, especially for cargo to Europe, the Far East and the USA from Colombo.”

The island’s exports, which fell last year because of recession, are picking up but now face higher freight costs after enjoying low rates for a long time.

The trend seems to be for rates go up further which is detrimental to our exports,” said Kuruppu.

Our advice to shippers is to go in for commercial agreements with shipping lines, to negotiate with individual lines to get competitive rates.

We advise shippers to go for long-term contracts to lock in rates for say, six months or so.”

Shipping lines began raising freight rates late last year after rates plunged to low levels because of the slump in trade and an oversupply of ships, resulting in huge losses