Pakistans exports will suffer another jolt due to sudden and abrupt increase in the Terminal Handling Charges (THC) by shipping companies from April 1,2009. Due to prevailing economic crises and ever-increasing cost of manufacturing, Pakistans exporters are already facing tough competition in global export market.
This increase will further push Pakistani products off the export market whereas, its competitive will get a further edge over priced Pakistani products. The shipping companies have increased the THC by 16 percent or Rs 1000 or from Rs 6550 to Rs 7550 on a 20" container and Rs 150 or from Rs 9850 to Rs 11,350 on a 40"container.
The Karachi Chamber of Commerce and Industry (KCCI) has long been demanding that the THC must be reduced, as it is on higher side in Pakistan, as compared to others countries in the region. Talking to Business Recorder, the former Vice President, KCCI and the Chairman, Consumers Traders Association, Haroon Agar said that increase in THC would directly hit import and export adversely.
He said Pakistan is already facing tough completion in the export market and this increase will further raise the prices of local produce as compared to other countries. Justifying his point of view, he said that Pakistan is importing around 70 percent raw material from abroad and its lending cost in Pakistan will increase due to increase in the THC, which untimely impacts the cost of production in the industrial units.
Agar said that due to high cost of production a number of industrial units have already gone out of production and this increase in the THC will simply fuel the fire. He feared closure of large number of industrial units will increase unemployment if the government did not act and pressurise shipping companies to withdraw this recent increase. In addition, exports/import business will also suffer and imported goods would cost further high to imposters and ultimately to the consumers.
Rebutting the claims of shipping companies that they have increased the THC due to increase in operational cost, he said that the factual position is that there operational cost have reduced considerably due to reduction in oil prices in the international market.
The Chairman, Shipping and Multi Mode Transport sub committee of KCCI, Nasir Mehmood during a chat on the issue has urged the Prime Minister, Federal Minister for Ports and Shipping, Federal Minister for Commerce and Advisor to Prime Minister on Finance to take notice of the recent increase in the THC and take appropriate measures to get it withdrawn by the shipping companies. He said that the THC is charged twice. First by shipping lines and then by terminal operators and will double tax the exporters of the country, he added.
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