The chairman of the Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) has highlighted the recent increases in Pakistan’s freight charges, saying the costs are stifling the country’s leather garment and general export industries.

Chairman Fawad Ijaz Khan says increases in fuel adjustment surcharges/bunker surcharges and war risk surcharges (WRS) have been made by airlines and shipping companies in response to the rising price of fuel caused by the outbreak of the Iraq war.

Shipping surcharges have increased $95 per 20 foot container and $190 per 40 foot unit while WRS have risen $130 per 20 foot and $260 per 40 foot. Airlines have imposed surcharges of between $0.12/kg and $0.16/kg and WRS of $0.8/kg. On May 1, 2003 general freight charges are also expected to rise.

Fawad says that Pakistan’s exporters cannot compete in international markets as the added charges are making their products uncompetitive. He has urged the Ministry of Commerce and the Export Promotion Bureau (EPB) to review the price hikes as a matter of urgency to save the country’s export industries from collapse. Fawad suggested that the EPB should refund the costs through Export Development Surcharges (EDS), which already provide exporters with freight subsidies.

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