Press Center | Freight Shipping Logistics News
Oct 16, 2013
General
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Two shipping lines have been ordered to cancel a planned increase in freight rates by the maritime agency.
Two shipping lines have been ordered to cancel a planned increase in freight rates by the maritime agency.
Maersk Shipping Line and Emirates Shipping Line announced that starting Tuesday, October 15, they had introduced a general rate increase of $200 (Sh17,000) and $400 (Sh34,000) for 20-foot and 40-foot containers, respectively.
The Kenya Maritime Authority described the new rates as arbitrary and exorbitant.
“The increase will apply to all cargo from East China to East Africa (including Kenya, Tanzania, Uganda, Rwanda) and South Sudan,” Maersk said in a notice on its website.
Announcing the increase, Emirates Shipping cited “tight demand in the market” for the decision.
However, maritime authority director-general Nancy Karigithu said in a notice published in the dailies on Wednesday:
“The unilateral determination of the increase contravenes agreed mechanisms for the adjustment of maritime service tariffs in that no consultation with the affected parties or the regulator was undertaken,” she said.
The authority urged importers and shippers to reject the increase as it is arbitrary and exorbitant and will adversely affect trade in Kenya.
The Shippers Council of East Africa urged the region’s businesses to come up with a plan to counter such arbitrary increases, including boycotts.
However, Kenya Ships Agents Association executive officer Juma Tellah defended the increase, saying the rates were not fixed and shippers could negotiate with shipping lines.
“There is a misinterpretation that the rates are too high. Although the quoted amounts are between $200 and $400, negotiations may see shippers paying only $50,” he said.
He said in the past five years, rates have decreased from $1,200 for a 20 foot container between Mombasa and Cairo, for instance, to between $750 and $850.
He said shipping lines have an imbalance between imports and exports. When a vessel brings cargo into East Africa it sometimes goes back empty and business sense demands there has to be a balance,” he said.
Maersk Shipping Line and Emirates Shipping Line announced that starting Tuesday, October 15, they had introduced a general rate increase of $200 (Sh17,000) and $400 (Sh34,000) for 20-foot and 40-foot containers, respectively.
The Kenya Maritime Authority described the new rates as arbitrary and exorbitant.
“The increase will apply to all cargo from East China to East Africa (including Kenya, Tanzania, Uganda, Rwanda) and South Sudan,” Maersk said in a notice on its website.
Announcing the increase, Emirates Shipping cited “tight demand in the market” for the decision.
However, maritime authority director-general Nancy Karigithu said in a notice published in the dailies on Wednesday:
“The unilateral determination of the increase contravenes agreed mechanisms for the adjustment of maritime service tariffs in that no consultation with the affected parties or the regulator was undertaken,” she said.
The authority urged importers and shippers to reject the increase as it is arbitrary and exorbitant and will adversely affect trade in Kenya.
The Shippers Council of East Africa urged the region’s businesses to come up with a plan to counter such arbitrary increases, including boycotts.
However, Kenya Ships Agents Association executive officer Juma Tellah defended the increase, saying the rates were not fixed and shippers could negotiate with shipping lines.
“There is a misinterpretation that the rates are too high. Although the quoted amounts are between $200 and $400, negotiations may see shippers paying only $50,” he said.
He said in the past five years, rates have decreased from $1,200 for a 20 foot container between Mombasa and Cairo, for instance, to between $750 and $850.
He said shipping lines have an imbalance between imports and exports. When a vessel brings cargo into East Africa it sometimes goes back empty and business sense demands there has to be a balance,” he said.
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