Shippers hike freight rates to compensate for losses

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Jasim Uddin Haroon
Shippers have started charging higher freight rates to compensate for heavy losses being incurred by them in carrying cargoes to and from Bangladesh, sources familiar with external trade said Friday.
The shipping companies have increased at least 100 dollars for carrying a 20-foot container loaded with import items, they said.
AS Chowdhury, a senior official of Seaconsortium, a leading feeder operator, told the FE: "A number of main line operators raised the GRI (general rate increment) nearly two weeks back."
"We've received the notices and many lines have followed the notice individually," Mr Chowdhury added.
Sources at the main line operators (MLOs) said they have adjusted the new rates mainly due to fewer cargoes being transported to and from Chittagong and Mongla ports of Bangladesh these days.
The volume of both in-bound and out-bound cargoes has fallen in recent months, they added.
Local importers procured over 131,000 Twenty-foot Equivalent Units (TEUs) from USA during January-October of 2010 period. It fell to 54,322 TEUs during the same period in 2011, statistics prepared by a leading main line operator showed.
Import from Europe also fell marginally during January-October period in 2011. It was 115,391 TEUs in 2010 and 108,643 TEUs in 2011, the statistics showed.
Mr Chowdhury however said freights for carrying of imported goods will rise following the new spikes in rates.
Leading local importers, especially those who carry goods through containers, are worried over the latest review of freights.
They hinted that this would push the rate of inflation further up in the country, where a double-digit inflation has been persisting over the past few months hitting hard the low income group of people.
Abul Bashar, chairman of Masud and Brothers, a leading importer of food items, told the FE: "Our suppliers have already informed us about the rise in freights."
He said this will surge the prices of imported goods in the local market.
Mr Bashar said the freight rates for Bangladesh are extremely high compared to those in other neighbouring nations.
Bangladesh received around 600,000 TEUs of imported goods each year and it will make the industrial raw materials costly as well.
"We import fabrics and accessories needed to export clothing and this rise will make our products costly or reduce our profit margins," Anwar-ul-Alam Chowdhury, managing director of Evince Group, a leading garment exporting company told the FE.
However, feeders and MLOs said that their business has been suffering in recent months mainly due to poor cargoes.
They said that both export and import cargoes have fallen during the September-October period of the last year.
They said in many cases they are carrying empty containers following poor number of export and import cargoes.
In December, they carried nearly 19,000 TEUs of empty containers up to Singapore.
They also carried nearly 6,500 TEUs of empty containers up to Port Klang of Malayasia, the shippers said.