April 4, 2013

Indian seafood exporters react over reefer container freight rates' hike

Indian seafood exporters are upset over the unilateral increase in reefer container freight rates by shipping lines that have imposed an across-the-board hike of US$1500 a container, irrespective of the size of the container and destination.

The Seafood Exporters Association of India said that the increase in rates may affect exports as exporters may not be able to pass on the higher freight bill to the buyers. The association had taken up the issue at the Board of Trade Meeting convened by the Commerce Ministry in New Delhi on March 22 where the officials from the Shipping Ministry were present.

D.B. Ravi Reddy, National President of SEAI, told Business Line there is no regulation on fixing the freight to specific destinations and this has resulted in arbitrary rate increase.

According to some exporters, though the lines had given the notice for a US$1,500 increase, a majority of them are now charging rates in the range between US$700 and US$1000 depending on volumes. It is not uniform and smaller exporters are charged more.

Shippers exporting low-value seafood to destinations in East and West Asia would be put to serious problems and they would not be able to compete with their competitors, Ravi said.

According to Reddy, the seafood industry is passing through a tough phase due to recession in the US and Europe. The operational costs are high and the increase in freight rates will put further pressure on the margins.