Delays and congestion continue to affect all carriers, and are having a detrimental effect on member lines' ability to operate efficiently.

Raja Simhan T.E.

Chennai, Nov. 17

CONTAINER freight rates to the UK and some of the west European ports will increase by $150 a TEU (twenty-foot equivalent unit) from next month following a rate restoration announced by the Karmahom Conference.

Starting December 1, the conference will implement a rate restoration in the Westbound to UK, North Continent, Scandinavian, Baltic and Mediterranean Ports. For a forty-foot equivalent unit (FEU) the increase is $300. The increased rate levels will be valid until January 31, 2006, says a notice issued by the Karmahom Conference, which describes the increase as "Westbound Rate Restoration."

Freight rates to the UK hover between $900 and $1,050 a TEU and to other west European ports it would be slightly higher, said an industry source.

The Karmahom Conference said that its member lines were facing considerable increase in charter rates, which continue to rise dramatically, as well as a worldwide shortage of container equipment (boxes). Further, delays and congestion continue to affect all carriers, and are having a detrimental effect on member lines' ability to operate efficiently.

According to an industry source, six months ago, for a 20,000 GRT (gross registered tonnage) container ship, the charter rate was $20,000-$25,000.

This is compared with $4,000 to $5,000 in 2001-2002.

The Karmahom Conference is a cartel of shipping lines controlling shipping in India, Pakistan, Bangladesh and Sri Lanka.

(This article was published in the Business Line print edition dated November 18, 2005)
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