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Venezuelan state builds US$1 billion in runaway debt for boxes gone astray
VENEZUELAN state agencies have accumulated US$1 billion in debt with shipping firms due to delays in returning containers, Reuters reports
State agencies have held containers for months or simply not returned them, at times leaving them for years in oil industry facilities or on provincial farms at $100 per day per container, according to industry sources.
This coincides with state agencies importing goods, particularly food the debts largely owing to Maersk and Hamburg Sud.
While it is unclear if shipping firms will ever be able to recover the debt, freight rates to Venezuela have risen to become among the highest in region - three times higher than other South American destinations.
This contrasts to global freight rates, which are falling in response to lower fuel prices and weaker international trade.
Venezuela's shipping industry association last year estimated the debt at $817 million for containers that were not returned or returned late. The figure has now topped $1 billion, according to an industry source with first-hand knowledge of situation.
Shipping lines over the last year have increased rates for delivery to Venezuela to compensate for the associated risks, which include risk of theft or assault, difficulty in obtaining payment for merchandise, and long queues at ports.
State agencies have held containers for months or simply not returned them, at times leaving them for years in oil industry facilities or on provincial farms at $100 per day per container, according to industry sources.
This coincides with state agencies importing goods, particularly food the debts largely owing to Maersk and Hamburg Sud.
While it is unclear if shipping firms will ever be able to recover the debt, freight rates to Venezuela have risen to become among the highest in region - three times higher than other South American destinations.
This contrasts to global freight rates, which are falling in response to lower fuel prices and weaker international trade.
Venezuela's shipping industry association last year estimated the debt at $817 million for containers that were not returned or returned late. The figure has now topped $1 billion, according to an industry source with first-hand knowledge of situation.
Shipping lines over the last year have increased rates for delivery to Venezuela to compensate for the associated risks, which include risk of theft or assault, difficulty in obtaining payment for merchandise, and long queues at ports.
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