Friday, October 22, 2021
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Marina sees no hike in freight rates

THE Maritime Industry Authority (Marina) sees no increase in local freight rates despite escalating fuel prices and the ongoing political turmoil in the country.Marina National Capital Region chief Roberto Arceo, in an interview, said increasing prices now, particularly freight rates, is the least of the consideration of shipping companies."We expect local freight rates to remain at current levels and expect no rate increases in the next months," Arceo said.

He said shipping firms are competing with each other on the best onboard services to lure more shippers.Competition provided by the airline industry is also one of the reasons Marina expects no increase in shipping rates.Arceo said if there would be any movement in rates in the coming weeks, it would be downward.

Some sectors are worried that with the full deregulation of the shipping industry vessel operators will jack up rates each time there is an increase in fuel prices.To date, only Sulpicio Lines, Inc. has adopted a 6.9% upward adjustment in rates, which took effect last July 6.Marina expects that other shipping lines, particularly the big ones such as Aboitiz Transport System and Negros Navigation, will maintain their rates to lure more shippers.

"Shipping operators now are in a wait-and-see position, awaiting the move of their competitors before making any business decision. They cannot increase their rates by more than 10% due to competition being created by the local airline industry," Arceo stressed.Aside from this, one of the reasons pulling shipping rates even lower is economies of scale. Arceo explained shipping operators are now consolidating cargoes from smaller ports and surrounding inland economies to justify bigger carrying vessels for better-cost efficiency.


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