Concern on increase in freight charges

Karachi: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the Ministry of Commerce (MINCOM) to the exorbitant increase in freight of refrigerated containers on the pretext of General Rate Increase (GRI). This has caused substantial losses to exporters of perishable and frozen goods exporters and cancellation of orders and loss of business.

President UNISAME Zulfikar Thaver said the union has received complaints from exporters of fruits, vegetables, frozen fish, meats and flowers and the sudden increase in freight rates by almost US Dollars 1500 per container per route is beyond comprehension.

He said surprisingly the Trade Development Authority of Pakistan (TDAP) is silent and has not advocated the cause of the exporters of perishable and frozen goods. Other countries are giving export subsidies on exports of fruits and vegetables and frozen food items and pre-cooked food but leave aside subsidy the TDAP is not prepared to convene a meeting to question the shipping lines of their monopolistic behaviour.

Sajjad Minhas a leading exporter of Kinoos and convener UNISAME Punjab said at the end of 2012 a leading shipping line announced US $ 1500 on each refrigerated container on all the routes as GRI with effect from 1st Jan 2013. All the other shipping lines followed and demanded the same increase from exporters. Most of the Exporters negotiated with shipping companies and succeed to get some relief around 500 to 800 $ except the leading line which initiated this unfair increase. Many exporters cancelled their orders because buyers refused to pay this extra amount.

He said imposing of this GRI has badly affected the export of perishable items specially Kinnoo this season which has shown reduction of 50%. He lamented that potato is also going to suffer in the coming season due to this imposition of GRI. Likewise all exports of perishable and frozen goods will decline in the coming summer season resulting in terrible loss of business and fall in much needed foreign exchange earnings.

The union has urged the government to take notice of the shipping cartel as many SMEs involved in exports of perishable cargo will have to shut shop.