Shipping to Europe set to get 27% dearer

Come September, shipping to Europe is going to be dearer by nearly 27 per cent. Burdened with high input costs and the trend of lower freight rates, container shipping lines operating in the India-Europe routes are considering increasing freight rates in the westbound trade from September 1.

Shippers will have to cough up an additional $200 per 20-ft container (TEU) against the current level of $700 a TEU.

Industry analysts said cost of shipping for major commodities would shoot up as the India-UK continent sector was a prominent trade leg. "The sector is also witnessing robust trades of pharmaceutical products, frozen vegetables, menthol, gelatine capsules and fruits in reefer containers," they added.

The major commodities traded between the Indian and European sectors include garments, machinery, auto ancillaries, iron & steel, chemicals, leather products and handicrafts.

India Pakistan Bangladesh Ceylon Conference (IPBCC) "� a platform for container shipping lines "� has announced a rate hike of $200 a TEU and $400 per 40-ft container (FEU) for the shipping routes including the UK, North Continent, Scandinavian, Baltic and the Mediterranean ports from Indian ports such as Mumbai, Mundra, Kandla and Pipavav.

Trades from the ports of Kochi, Chennai, Tuticorin, Kolkata and Haldia to these European destinations will have hikes of $100 a TEU and $200 an FEU, which will be effective till December 31 this year.

"Most of the shipping lines are witnessing an erosion of revenues owing to lower freight rates. They cannot sustain this anymore as the fuel costs have also gone up 40 per cent during the year. Moreover, competition between shipping lines in the India-Europe sector is stiff," said a senior IPBCC executive.

At present, freight rates of container shipping lines are hovering around $750-800 a TEU and $1,400-1,500 an FEU. Last year, the rate for a 20-ft container was $850-1,000, while that for a 40-ft container was $1,600-1,900.

The Shipping Corporation of India, along with international majors like Maersk Line, CMA CGM and Zim, is one of the leading members of IPBCC.