Following a pick-up in demand, coupled with increase in trade volumes, major shipping lines operating in the country have hiked freight rates for shipments to Europe and the US Cargo shipments to Europe and the US have become dearer following a hike in container freight rates by 30-40% by major shipping firms operating in the country. It is believed that a pick-up in demand and increase in trade over the last few months have initiated this move by shipping firms. Freight rates have increased by US$250-300 for 20 feet (ft) containers and US$300-600 for 40 ft containers.
In this context, Rajdeepak Bhargava, CMD of Avignon Shipping Company, a mid-sized shipping firm in Pune says, “A spur in freight rates is an indication that the markets in the developed economies are on a revival mode after incurring losses during the global economic meltdown. Cargo shipments to the developed economies constitute a major portion of the earnings of the domestic shipping firms.”
 Companies to hike freight rates
The Shipping Corporation of India (SCI) has already started following the revised rates for shipments from India to North Europe, the UK, Mediterranean and Black Sea from March 1, 2010. An official of SCI, who did not wish to be named, added that the hike in freight rates is not only accredited to a pick-up in demand, but ever increasing operational costs has also prompted the move.
In this context, Francy Gonsalves, managing director of Jos Shipping, a small-sized shipping firm in Vasco-da-Gama, Goa, comments, “Shipments to Europe and the US might witness a decline following a hike in freight rates by shipping lines, which should have waited for some more time before introducing a hike.” Other firms that have announced a price hike to come into effect from March-April are Maersk Line, United Arab Shipping, Hanjin Shipping and CMA CGM SA. As of now, shipments to Europe for 20 ft and 40 ft containers cost US$1,500 and US$2,000, respectively. For shipments to the US, customers need to pay US$2,100 for a 20 ft container and US$2,800 for a 40 ft container.
Arup Choudhury |
