Higher freight cost, insurance premium hit exporters

Pune: Exporters are facing higher freight costs and insurance premiums, besides a longer transport time on account of the ongoing conflict in West Asia."The intensity of the crisis due is going to increase in the coming days which will put pressure on supply chains. The outward shipments to West Asia are stuck but those to other parts of the world are continuing albeit at higher freight costs," said Vishal Makar, MD, Oriental Industries, a Pune-based rubber products manufacturing company.Industry representatives said the cost of transporting has increased by three to five times compared to a couple of months back. The cargo container rates are currently at around $1,500 (Rs138,810) per 20ft container, industry people said. Similarly, the time taken for shipments to reach their destination have increased by three to seven weeks depending on the destination on account of the longer route around the Cape of Good Hope taken by ships to avoid the crisis area, said HP Srivastava, president of Deccan Chamber of Commerce, Industries and Agriculture.The containers that already were in transit are stranded at various locations from Mumbai to Dubai or other ports in the region. Specifically, food processing and agricultural produce exports are impacted the most as these commodities are perishable, said Prashant Girbane, director general of Mahratta Chamber of Commerce, Industries and Agriculture. The rising insurance premiums have also added to the costs.