Bangladeshi low-value garment shippers groan over November rate hikes

SHIPPERS in Bangladesh are protesting November's round of freight rate increases announced by major carriers on the India subcontinent to Europe route, saying they will cut margins in the sale of low value clothing.

"It is really bad news for us. The new rates by shipping companies will affect us adversely," said Shafiul Islam Mohiuddin, president of BGMEA (Bangladesh Garment Manufacturers and Exporters Association). "If the rates are implemented, local garment makers will suffer to a great extent."

Singapore carrier APL will increase rates by US$500 per TEU and $1,000 per FEU, reported Dhaka's Financial Express. Rates of Taiwan's Evergreen Marine will rise $525 per TEU, Korea's Hanjin by $500 per TEU, Denmark's Maersk by $500 per TEU, Japan's "K" Line by $525 per cent TEU and NYK by $525 per TEU while Hong Kong's OOCL will increase rates $525 per TEU.

Defending the country's $19 billion garment export sector, Mr Mohiuddin said: "If the rates are implemented, local garment makers will suffer to a great extent."

Anowar ul Alam Chowdhury Parvez, managing director of Evince Group, said the T-shirt producing companies will suffer seriously as they send their goods on C&F (cost and freight) basis.

Europe is the main export destination for Bangladesh. Apart from this, local entrepreneurs import machinery and other industrial equipment from Europe.

Said Maersk country manager Shamim Ul Huq: "The new GRI [general rate increase] is necessary to sustain the business of the shipping companies," adding that rates had fallen over the last two years.

Said NYK country manager Rashed Ahmed: "Shipping fares dropped to nearly 50 per cent following poor trade across the globe. The new rates will not affect Bangladesh's shipment as it is lean period for exports."

Said "K" Line official Sahed Hasan: "Chinese cargoes fell this year affecting the shipping companies," also expressing doubts to the newspaper that carriers would be able to implement rates fully.