Import, export cost rises as freight rates rise
Freight costs have risen in the last few weeks due to the undesireable effects of Covid-19 found on the global shipping sector, pushing the price for importers and exporters found in Bangladesh, industry persons said.
Major mainline businesses have elevated the freight costs citing an acute shortage of empty containers following a surge popular for imports.
Besides, the ongoing coronavirus pandemic has got disrupted the global supply chain, causing delays found in shipment and congestion in several ports, they said.
CMA-CGM, the fourth greatest container shipping line in the world, has announced that it could implement new freight costs for the routes between basic ports in Northern Europe and the Indian subcontinent.
The brand new rates are set to come into influence on January 1.
Similarly, the operators running feeder vessels between Chattogram and different hub ports such as for example Colombo, Singapore and Port Klang of Malaysia, last month increased the freight charge by imposing a crisis cost recovery surcharge of $75 for each and every loaded container and $37.50 for a clear container.
The congestion at several ports is creating a pile-up of containers, which has led to additional operating charges for vessels, forcing shipping lines to improve the freight rates, according to Ahsanul Hoq Chowdhury, chairman of the Bangladesh Shipping Agents Association.
Masudur Rahman Bhuiyan, a good Chattogram-based fruit importer, is importing 18 containers of apple from China with the cargo set to arrive by the end of December.
"Last month, I paid $3,200 to ship a single 40-ft . container from China. Nowadays, the freight fee has increased to $4,200 for the same container," said Bhuiyan, adding that he previously no other option but to improve the value of his goods to make up for the excess expense.
Local buyers have started importing different food items such as chickpeas, lentil and wheat from countries like Australia, Canada and Egypt with an eye in next Ramadan.
Abul Bashar Chowdhury, a commodity importer located in Khatunganj, said freight fees from importing countries have previously increased.
"Shipping liners from these countries nowadays charge $4,000 typically for each 40-ft . refrigerated container from $1,400 previously," he added.
Because of this, the import cost rose about $20 per tonne.
Chowdhury also said his Australian suppliers told him that they would not manage to deliver his shipment before end of February because of a shortage of empty containers.
Earlier this week, CMA-CGM informed its customers that it could not have bookings for cargoes bound for ports in southern China for many weeks in early 2021 as a result of suspension of feeder services.
Nasir Uddin Chowdhury, chairman of the standing committee on port and shipping of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the hike found in freight costs would impact the country's garment exports.
"As almost all of our recycleables happen to be imported, the freight charge hike will improve the import cost. The export cost may also be raised for the same reason," he added.
The effect on the export costs will be felt within the next season when buyers must adjust the additional freight charges with the costs of their following order, said BGMEA Primary Vice President MA Salam.
Criticising the rising style of freight charges, this individual said every organization sector had been damaged by the pandemic.
"As a result, the shipping sector shouldn't have arbitrarily brought up the freight rate to recuperate their losses at the trouble of other sectors."
