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Sat, 04 Jul 2009 | 06:21 GMT

Container handling fees at UAE ports rise by 60 per cent

Emirates Business 24/7
 
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11 September 2008
The cost of handling inbound and outbound containers of all sizes at UAE terminals has increased by 60 per cent on average in the past 18 months - resulting in a relentless increase in overall container freight charges.

The increase in handling charges has been caused by a shortage of manpower and berthing space combined with the growing volume of containers at ports.

Jebel Ali Port in Dubai, Port Khalid and Khorfakkan in Sharjah and Fujairah PortFujairah PortLoading... have all increased their handling fees since last year. The cost of handling a 20ft loaded container at Jebel Ali Port has increased to Dh750 from Dh380 in February last year, while handling a 40ft loaded container now costs Dh870 compared to Dh460 at the beginning of 2007.

Port Khalid and Khorfakkan Container Terminal (KCT), which are popular for container shipments from around the region, Asia and Africa, have increased their charges for handling a loaded 20ft container to Dh475 from Dh280 last year and a 40ft loaded container to Dh700 from Dh430.

Trans-shipment of a 20ft loaded container at both ports now costs Dh525 while a 40ft loaded container costs Dh745 compared to last year's charges of Dh400 and Dh520, respectively.

"The cost of everything ranging from manpower, fuel, rent to raw materials has gone up tremendously," said Keith Nuttall, Commercial Manager of Gulftainer CompanyGulftainer CompanyLoading..., which operates the Port Khalid and Khorfakkan terminals.

He said the cost of trucks had increased by 35 per cent in the past 12 months. "This means a 35 per cent increase in our operational costs and the only way to offset that is by increasing our company's tariffs," he said.

Nuttall said the increase in tariffs only reflected the general inflation situation in the country and were not driven by any desire to increase revenue generation.

GulftainerGulftainerLoading... last adjusted its container handling tariffs in March, but Nuttal said further increases were inevitable if operational costs continue to rise. "Our tariff increases have been marginal but if costs continue to rise the way they are doing now we will keep reviewing these charges," he added.

Abu Dhabi's terminal has increased its tariffs for handling a 20ft loaded container to Dh320 compared to Dh210 early last year and Dh420 for a 40ft loaded container compared to Dh300 at the beginning of 2007.

An official at DP WorldDP WorldLoading..., which operates the terminals at Jebel Ali, Fujairah and Abu Dhabi's Mina Zayed ports, said any increases in handling fees were not arbitrary but were the result of economic and cost trends. "We are not sitting in isolation as costs everywhere increase. We are definitely affected by any increases in costs and we have to mitigate them through a review of our tariffs," he added.

However, industry sources said the extra charges are driven by the high congestion levels at the ports, which is hurting shipping and logistics companies.

The huge increase in airfreight rates has led to a surge in container volumes as shippers attempt to find cheaper modes of transport. However, the increase in container handling fees both at domestic and foreign ports is causing a spike in container freight rates, which have almost doubled in the past 12 months.

For example, shipping a 20ft container from Jebel Ali to Rotterdam, Europe's largest port, through Inchcape Shipping Services currently costs Dh3,300 while a 40ft unit costs Dh6,200 before port charges.

In the same period last year shipping a 20ft container from Dubai to Rotterdam cost Dh1,780 while a 40ft one cost Dh3,122.

Inchcape is the UAE agent for Hamburg-based Hapag-Lloyd, one of the five top container shippers.

Saqr Port in Ras Al Khaimah has not increased its container handling fees in the past 12 months as part of a government policy to attract more shipments.

The port has the lowest tariffs in the market - Dh170 for handling a 20ft loaded container and Dh270 for a 40ft loaded container.

By Ashaba K Abdul Basti

© Emirates Business 24/7 2008

 
 
 
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