Freight charge hike to take costly toll

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Ship owners’ unilateral raising of container freight by $200 per TEUs (twenty equivalent units) from December 1 will adversely affect export-import trade, particularly making imported items including essentials costlier, business sources said.

They increased the fare by $200 for each loaded TEUs of containers and $50 for each empty container on the route connecting Chittagong port with Singapore, Malaysian and Sri Lankan ports. The enhanced rate has been effected without prior notice.

Earlier, the average freight was $300-350 per TEUs on those routes but it would now go up to $500.

“The sudden freight hike will directly affect overall business in the country and increase the prices of consumer items” said Mir Nasir Hossain, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

“It will also increase the prices of all industrial raw materials and lower our competitive edge in the global market,” he added.

Asked about the apex business body’s possible action in such a situation, he said, “We are working on it and we will have a meeting with the shipping adviser soon.”

The issue also came up at an emergency meeting of the FBCCI yesterday, according to sources.

The business community protested the fare hike without prior notice. This ‘illogical’ step would make imported items costlier and also cause losses to exporters.

“The negotiation on freight hike was done in Singapore among shipping companies and we only got the notice,” said a shipping agent.

Maqsudur Rahman, president of Bangladesh Frozen Food Exporters Association, said “Ship owners have increased freight without prior notice, and the fare hike will adversely affect export sector. We are worried as it will increase cost of products and losses of exporters will go up.”

He mentioned that the export sector is already suffering a lot due to political agitation in the country over the last two months. And now the enhanced fare has been made effective from December 1 informing them about it only one day or two days earlier.

The freight per TEUs of containers bound for US would now go up to $8,000 from $5,600-5,700 earlier, he said. Ship owners increased the fare considering their losses due to the delay in discharging goods at the premier ports, he added.

Earlier in June this year, the Singapore-based ship owners’ association Chittagong Feeder Trade Committee had imposed an additional congestion surcharge of $150 per TEUs for Chittagong bound cargo.

The surcharge was withdrawn in August after consultation with the government and on assurance of improving the situation. But shipping agents say the port virtually remained inoperative for several weeks due to turbulent political situation in the country.

According to shipping agents, the owners were forced to increase freight as ships often had to wait for over 15 days before starting discharge of cargo. As a result, the turn around time of the ships went up abnormally, causing huge losses.

They however claimed that the ship owners had given a notice of fare hike around two weeks before making it effective.

BGMEA President S M Fazlul Hoque said the fare hike of containers is unlikely to affect garments sector directly as apparel export usually takes place on the basis of freight on board (FOB). But buyers would have to count extra bucks while placing orders for apparels from Bangladesh, he said.

He however declined to go into details before a thorough study of the fare hike.

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