Indian exporters again bemoan shipping costs, blame conferences

Indian exporters fed up with high ocean transportation rates have turned to their nation's Competition Commission to sort out antitrust privileges enjoyed by ocean carriers serving Indian ports.

A report Friday in the Economic Times said tariffs charged by the 13 member lines of the India Pakistan Bangladesh Ceylon Conference are at the center of the controversy.

Flooded with complaints from exporters about high tariffs, the commerce department has asked the Competition Commission of India to investigate the alleged cartelization by shipping companies," the report said. "While inland freight movement may have become cheaper for certain commodities thanks to railway minister Lalu Prasad, shipping charges to key destinations like Europe and the United States have more than doubled in the last couple of years.

The latest hike announced by IPBCC is a $100 increase per TEU from March 1. This will incrase charges for moving goods from domestic ports to European ports to $1,400 per TEU. The hike comes on the heels of a $400-per-FEU and $200-per-TEU increase in freight rates effected from the beginning of February.

Two developments will likely change the scenario this year. First the fledgling CCI formally gets underway in June, and then in October, an European Union regulation banning conferences in European trade takes effect. That regulation wouldn't affect Indian trade with other regions.

In the meantime, shipping lines have defended the increases by saying that operating costs are high, and that shippers are free to negotiate individual rates with carriers as the IPBCC tariff recommendations are not binding. Shippers argue that higher shipping costs are making Indian exports uncompetitive, particularly as the rupee rises in value against the dollar. 

Source: American Shipper