Exporters from Sri Lanka in Trouble due to Increased Shipping Charges
A rise in shipping charges has raised many problems for Sri Lankan exporters. Export sectors, especially clothing, are the biggest victims as some large shipping companies have changed their routes.
Exporters of Sri Lanka are in a crisis situation as the number of container ships moving towards the west from Colombo has fallen drastically as they are heading towards India.
Shipping charges have swelled by approximately $600 for the standard Twenty-Foot Equivalent Unit (TEU) in the last six months. This has led to crisis for the exporters from the island country, as they compete on the basis of time, price and innovation with India.
Jaynath Perera, Chairman, Sri Lanka Shippers Council, said that since some large shipping companies have altered their routes in the last six months, the export of garments, rubber, tea and coir have been affected significantly, as published by LBO on June 28, 2007.
Sri Lankan shipping agencies stated that the hiked shipping costs would come into effect from July 1, 2007. Shipping costs for imported containers, however, are unaffected.
The shipping agencies expect the charges for containers exported from the country to rise from US$ 150 to US$ 200, as published by Colombo Page on June 28, 2007.
The clothing sector, that accounts for over 50% of the total export trade volume, is the biggest sufferer of increased as the exporters face strict deadlines from clients.
However, according to a shipping consultant and a senior member of the clothing industry’s Joint Apparel Association Forum, Rohan Masakorale, airlift shipments can be considered as an alternative but it’s 75% costlier than shipping. So, due price-sensitive nature of the industry, transporting goods by air is not their cup of tea. The port of Colombo is fighting to get back its position as the south Asia’s transshipment hub, said Rohan, as published by LBO on June 28, 2007.
As per the news published by Colombo Page, Perera said that previously, ships used to come to Colombo to collect the Indian freight and then head towards Europe. But now, there’s a dearth of approximately 600 Twenty-Foot Equivalent Unit of cargo space every seven days out of Colombo.
Dilhan Fernando, Director, Dilmah, a leading tea exporters of Sri Lanka, said, the export prices have risen invariably and when measured in terms of the reduced capacity and flexibility, the results have been more damaging, as per the news published on Colombo Page.