Shippers worry as freight rates surge 300%

Sri Lankan businesses are grappling with higher costs as sea freight rates have skyrocketed by 300 percent.
Raising alarm over recent developments, the Sri Lanka Shippers’ Council (SLSC) yesterday said it is “deeply concerned” with the surge in rates imposed by shipping lines navigating the waters of the Cape of Good Hope en route to Europe and the United States.

“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,” the SLSC said in a statement to the media yesterday.

The Council emphasised the importance of maintaining global competitiveness and sustainable business practices. It shares that it 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.

“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,” it said.
The United Nations Conference on Trade and Development (UNCTAD) in its report released last week highlighted that the recent attacks on commercial vessels in the Red Sea have severely affected shipping through the Suez Canal, adding to the existing geopolitical and climate-related challenges facing global trade and supply chains.

The UNCTAD underscored that the far-reaching economic implications of prolonged disruptions in container shipping, threatens global supply chains and could potentially delay deliveries. This would cause higher costs and inflation. The full impact of higher freight rates will be felt by consumers within a year, it said.