Indian seafood exporters are facing financial stress due to skyrocketing freight rates. The shipping cost to Los Angeles has taken a major surge to $10,500 from $3,800 in June, while rates to Europe have almost tripled to $8,000 from $3,000. For New York, the rates have jumped to $6,500 from $4,500, as reported by the Seafood Exporters Association of India.
Pawan Kumar G, national president of Seafood Exporters Association of India told business line that we are at the threshold of holiday season prime time for frozen seafood exports to the US and Europe for Thanksgiving in November followed by Christmas and New Year.
The steep hike in freight rates without any notice in such a short span of time by the shipping lines was highly uncalled for and will affect exports from India in this season very badly. 50 per cent of the revenue earnings comes from the US and Europe sectors out of the $8 billion exports of marine products according to Mr Pawan.
The imposing of higher rates at their whims and fancies without giving any prior information to the trade by the shipping lines are seen in an unprofessional light.
Moreover, there are predictions of further hike in the month of August. It is imminent to appoint a regulatory authority to address the unauthorised freight rate increase by shipping lines, he reiterated that the association members will soon meet the Director General of Shipping to put in place a system similar to the existing one implemented by the Director General of Civil Aviation for air freights.
A few shipping firms are setting containers at much higher prices than the ones quoted by taking advantage of the market scenario thus sending the small and medium scale exporters into a state of despair. The Red Sea crisis that led to the diversion of ship via Cape of Good Hope is not a problem anymore and the shipping lines are imposing increased prices due to the rising export demand from China.
Blogger:
Dr. Sathish Prasad
Senior Scientist – Aquatic Animal Health
Growel Innovation Center,
RS NO.57, Chevuru Village, Sriharipuram Panchayat, Mudinepalli Mandal, Krishna District – Andhra Pradesh India – 521329
Email: [email protected]