The government has asked shipping companies, vessel operators and their agents to refrain from “predatory, non-transparent and opportunistic pricing” practices as freight costs rise sharply amid disruptions caused by the ongoing conflict in West Asia, PTI reported citing sources.
The advisory was issued by the Directorate General of Shipping (DGS) on Monday after the regulator received representations from stakeholders in the EXIM trade regarding the levy of multiple ancillary charges by shipping lines and their agents.
These charges, the regulator said, are widely perceived as “non-transparent and opportunistic in nature”, leading to higher transaction costs across the logistics chain.
“In the interest of promoting transparency, fairness and predictability in the EXIM logistics ecosystem, all shipping lines, carriers and their agents are hereby advised to refrain from predatory, non-transparent and opportunistic pricing practices, including levy of exorbitant charges thereby taking undue advantage of prevailing geo-political issue,” the advisory stated.
The DGS also asked operators to clearly communicate all applicable charges upfront to exporters, importers and other stakeholders to avoid disputes within the trade ecosystem.
“They must should adhere to fair trade practices and avoid the levy of charges that may give rise to disputes within the EXIM trade and ensure that all applicable charges are communicated clearly and upfront to exporters, importers and other stakeholders,” the advisory added.
Freight rates have risen sharply in recent days as military tensions in the Middle East escalate, with Iran, the United States and Israel attacking one another, disrupting shipping routes and increasing uncertainty in global logistics.
An executive at a global shipping company said the conflict is forcing vessels to take longer routes around Africa, leading to higher fuel consumption and increased operational costs for cargo ships.
Meanwhile, an analyst at BigMint Research said crude oil prices, which averaged around $70 per barrel before the conflict, are now hovering around $90 per barrel, further adding to shipping and logistics costs.
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