Shipping cargo to US, Europe to become costlier from January

Shipping cargo to US, Europe to become costlier from January
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First Published: Tue, Dec 29 2009. 11 37 PM IST

Pirates bay: A container terminal at Jawaharlal Nehru Port in Mumbai. Carriers have announced a piracy-risk surcharge for all shipments from India to Europe and the US that pass through the Gulf of Ad
Pirates bay: A container terminal at Jawaharlal Nehru Port in Mumbai. Carriers have announced a piracy-risk surcharge for all shipments from India to Europe and the US that pass through the Gulf of Ad
Updated: Tue, Dec 29 2009. 11 37 PM IST
Bangalore: Container carriers have announced rate hikes from January for shipments from India to Europe and the US as they look to capitalize on a rebound in demand.
The rate hikes for shipments to Europe are in the range of $100-300 (Rs4,670-14,010) for a 20ft container and $300-600 for a 40ft container. The hikes will take effect from 1, 7 and 15 January depending on the carriers.
Pirates bay: A container terminal at Jawaharlal Nehru Port in Mumbai. Carriers have announced a piracy-risk surcharge for all shipments from India to Europe and the US that pass through the Gulf of Aden. Ashesh Shah / Mint
Some of the carriers that have announced rate hikes are Maersk Line, Mediterranean Shipping Co. SA, CMA CGM SA, Hapag Lloyd AG and Shipping Corp. of India Ltd (SCI).
It currently costs around $800 for shipping a 20ft container and $1,500 for a 40ft container from India to Europe.
For shipments to the US from India, customers currently pay $1,300 for a 20ft container and $1,800 for a 40ft container.
Carriers such as MSC and SCI have also announced a piracy-risk surcharge of $40 for a 20ft container for all shipments from India to Europe and the US that have to pass through the Gulf of Aden, located in the Arabian sea between Yemen and Somalia.
The surcharge is being levied to deal with the growing problem of piracy on ships transiting the Gulf of Aden, escalating operational costs, the carriers said in separate statements.
Some of the world’s leading container lines also plan to levy a so-called emergency revenue charge on shipments from Asia, including India, to the US from January to cut losses.
The emergency revenue charge of $320 for a 20ft container and $400 for a 40ft container will take effect from 15 January until new contracts for the year come into effect in May, a group of container lines said in a recent statement. Ocean shipment contracts to the US are generally signed for a year that runs from May.
Major container carriers are estimated to have lost $20 billion this year as the global recession damped demand for shipments, the group said. Container lines have anchored vessels and reduced sailings in a bid to revive rates amid a glut of new vessels that were ordered during a trade boom that ended last year.
“Container carriers are coming up with new nomenclature to push rates up,” said Apurva Jasraj, partner at Mumbai-based freight broking firm M Jasraj and Bros.
Analysts said the new charges could slow the pace of economic recovery.
“While the global economy is showing definite undertones of recovery, this additional levy along with the accompanying general rate increases is definitely going to put a spanner in the efforts of exporters and importers,” said S.R.L. Narasimhan, secretary of the Western India Shippers Association.
Jasraj said it was doubtful whether the planned rate increases would take hold. “It is a question of demand and supply,” he said.
p.manoj@livemint.com
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First Published: Tue, Dec 29 2009. 11 37 PM IST