The local market is predicted to feel the heat as a result of rising global container freight rates, which jumped by an unprecedented 400 per cent since the beginning of 2021, according to the vice president of the Amman Chamber of Commerce (ACC) Nabil Khatib.

He told Petra in an interview Saturday that concerned authorities “should be aware of this issue and adopt reasonable prices when calculating customs duties, which would help reduce the costs of imported goods to the local market”.

According to Khatib, the shipping rate of a 40-foot container from China to the port of Aqaba soared from $2,000 six months ago to about $10,000 now, an increase of $8,000 or 400 per cent.

He stressed that the impact of the rise in sea freight rates will reflect on the prices of imported items to the local market since customs duties are calculated on the value of the goods, freight and insurance fees.

Jordan annually imports about 500,000 TEUs, compared to 120,000 in exports.

Khatib clarified that sea freight rates have started to record “exorbitant” hikes since the start of the current year with no positive indications that the crisis might end anytime soon.

“The global shipping industry is suffering from a severe crisis at the present time due to a shortage of containers, which has led to a significant increase in shipping costs, in addition to the delay in receiving the purchased goods, especially those from China,” the ACC vice president said.

Citing international reports, Khatib noted that “unequal” recovery from the coronavirus pandemic is another driver of the rise in shipping costs, adding that there are global concerns that the freight rate hike might extend indefinitely.

He also pointed out that massive backlogs of empty containers in European and U.S. ports and fee accumulation forced shipping companies to ditch these containers after they found that the fees incurred on them were much higher than the costs.

Source: Ammon News