The cost of importing goods into the Gulf is to rise in early October, following the decision by European and Far Eastern shipping lines to increase their freight rates by between $50-150 a container. The rises, announced in late August, are seen as a first step by international carriers to restore profitability on Gulf routes, where rates have been declining since the end of the Kuwait crisis in 1991.
The 15 signatories to the Europe Middle East Rate Agreement (EMERA) were the first to announce the freight hikes. From 1 October, the cost of transporting a 20-foot equivalent unit (TEU) will rise by $50 to around $1,150 a container. ‘The rate restoration programme is required to enable EMERA member lines to improve the quality of services to the trade,’ an EMERA notice said.
The EMERA notice was followed by a similar announcement from the 13 member lines of the Japan Persian Gulf Rate Agreement (Jappercon). An increase of $150 a TEU will be imposed also from 1 October for all Far Eastern ports of origin, other than Japan, to the Middle East. For the larger 40-foot equivalent units, the rise will be $300.
Japan is excluded from the increase because of the strength of the yen.