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Sri Lankan Shippers’ express concern over 300% rise in freight rates

By: Staff Writer

February 29, Colombo (LNW): Despite the Operational Prosperity Guardian naval task force, Houthi attacks persist. Recent escalations involve an attack on a Maersk vessel, triggering heightened US response and UK considerations of targeting Houthi positions in Yemen. Iranian warship entry into the Red Sea and ongoing Houthi missile attacks further escalate regional tensions.

Global freight encounters disruptions as container carriers reroute away from the Suez Canal, resulting in extended lead times and potential port congestion. Freight rates surge, with Asia-N. Europe rates are up 173%, Asia-Mediterranean prices doubling, and carriers implementing surcharges ranging from $500 to $2,700 per container.

Operational challenges include adjusting schedules, adding vessels, and addressing potential congestion and shortages. Carriers, better equipped than during the pandemic, strive to manage diversions and maintain container traffic flow. Despite these challenges, air cargo currently shows no significant impact from ocean freight delays.

Sri Lanka Shippers Council (SLSC) yesterday expressed concern over an alleged 300% increase in freight rates and warned of damaging ripple effects.

“While welcoming the substantial uptick in container arrivals and movements at the Port of Colombo, the Sri Lanka Shippers’ Council (SLSC) is deeply concerned over the unprecedented 300% increase in freight rates imposed by shipping lines navigating the waters of the Cape of Good Hope en route to Europe and the United States,” the lobby group for exporters and importers said in a statement.

“This sudden surge in freight costs is causing a ripple effect, significantly impacting the global competitiveness of Sri Lankan manufacturers and the Small and Medium Enterprise (SME) sector. A primary concern revolves around the allocation of space, as transshipment movements are currently given priority,” SLSC said.

It emphasised the importance of maintaining global competitiveness and sustainable business practices.

“The Council is actively engaging in discussions with relevant stakeholders to address these challenges and arrive at solutions that strike a balance between the commercial interests of the service providers and the viability of the import and export sectors in Sri Lanka,” SLSC said in its statement.

In navigating these challenges, the SLSC said it is committed to fostering a collaborative approach that ensurs a mutually beneficial solution for all stakeholders.

“As Sri Lanka continues to position itself as a key player in the global trade landscape, the SLSC remains dedicated to navigating challenges and facilitating a conducive environment for businesses to thrive,” the statement added.

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