Exporters hit by freight rate hike

Exporters would now have to pay more for their shipments as most airlines, including state-run Air India, have raised freight rates between 15 and 30 per cent for both general cargo and perishables.

This has further squeezed their margins, which were already under pressure due a penalty they are paying for delays due to the recent volcanic eruption in Iceland.

Air India, Indian Airlines, Emirates, Jet Airways, British Airways, Kingfisher, KLM, Gulf Air and Air Arabia are picking the cargo of those exporters who are offering the highest freight per kg.

Air India sources confirmed revision in freight rates but refused to give details.

Exporters of fruits and vegetables are most concerned as they export 300 tonnes of goods daily, of which 150 tonnes is air cargo.

The fruit and vegetable exporters association has sought a 6 per cent packing credit line from the Centre along with transport assistance by way of subsidy. It has also requested airlines to reconsider their decision to raise freight rates.

Airlines "should not exploit the situation by increasing freights to recover their losses," said Ajai Sahai, director general of Federation of Indian Export Organisations.

Kaushik Khakhar, CEO of KayBee Exports told Business Standard: “Airlines are saying they have much more cargo to carry now compared to their capacity. Fruits and vegetables are low margin cargo and they cannot afford these high prices, which is causing a significant drop in exports and India’s competitive situation. Other countries have now got the advantage over India as their products are cheaper. India is expected to lose its market share."