Freight Rates

L to R: Samantha Ranatunga, Chairman, HVA Foods PLC; Jan Müggenburg, Chief Executive Officer, Müggenburg Group; Graham Stork, Chief Executive Officer, HVA Foods PLC; Sarva Ameresekere, Group Chairman, George Steuart & Co. Ltd.

Nov 23, 2009 (LBO) - Sri Lankan shippers are confronted with an increase in transportation costs to and from their markets with loss-making global carriers raising freight rates or announcing rate hikes from next year to restore profitability.
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Some lines have also withdrawn vessels and services to and from the region and introduced 'slow steaming' in an effort to reduce over-capacity in the container trades and to cut fuel costs.
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Among the lines that have already announced rate hikes or 'rate restoration' as they are called, are Maersk, the world's biggest container shipping line and a big customer of Colombo port, Mediterranean Shipping Company, Evergeeen, Hapag-Lloyd, and China's COSCO Container Lines.

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The rate hikes are being announced by shipping lines individually after shipping 'conferences' or cartels of lines were banned by the European Union on anti-competition grounds.

The shipping lines have argued that they need to raise freight rates in order to maintain their services to the region's shippers after a sharp fall in rates caused by over-capacity in recent months.

The over-capacity problem was caused by a huge building spree that shipping lines went on in recent years during the boom in shipping when freight and

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