As Christmas and New Year purchases go into full swing, seafood exporters are facing financial stress due to skyrocketing freight rates. The cost to ship to Los Angeles has surged to $10,500 from $3,800 in June, while rates to Europe have jumped to $8,000 from $3,000. For New York, the rates have increased to $6,500 from $4,500, according to the Seafood Exporters Association of India.
Pawan Kumar G, national president of Seafood Exporters Association of India told businessline that this is the prime time for frozen seafood exports to the US and Europe for Thanksgiving in November followed by Christmas and New Year season. The exorbitant hike in freight rates within a short time span that too without informing the stakeholders by shipping lines will go to have a major impact on exports from India in this season. Of the $8 billion exports of marine products, he said 50 per cent of the revenue earnings comes from the US and Europe sectors.
The shipping lines, according to him, are imposing higher rates at their whims and fancies without giving any prior information to the trade. There are indications from companies that there will be further rise in August.
Seeking to appoint a regulatory authority to address the unauthorised freight rate increase by shipping lines, he said the association members will soon meet the Director General of Shipping to implement a mechanism in line with the one introduced by the Director General of Civil Aviation for air freights.
Small and medium exporters are the worst affected as some shipping firms are setting containers at much higher prices than the quoted above by taking advantage of the market. The Red Sea crisis that led to the diversion of ship via Cape of Good Hope is no longer an issue now and the lines are imposing increased prices in view of the rising export demand from China, he alleged.