Mumbai/New Delhi, March 10 The Directorate General of Shipping, the regulatory body for the shipping sector, has advised shipping companies, vessel operators, and agents to refrain from "predatory, non-transparent, and opportunistic pricing practices" in the wake of disruptions caused by the conflict in West Asia, according to sources.
In an advisory issued on Monday, the DGS also asked them to ensure that all applicable charges are clearly communicated to exporters, importers, and other stakeholders.
The DGS advisory came after the regulator received representations from various stakeholders in the EXIM trade regarding the imposition of multiple ancillary charges by shipping lines/carriers and their agents.
These charges are perceived to be "non-transparent and opportunistic in nature," resulting in an increase in transaction costs in the logistics chain, the DGS said.
In addition, it said, they appear to be taking undue advantage of the prevailing geopolitical tensions and the war-like situation.
"To promote transparency, fairness, and predictability in the EXIM logistics ecosystem, all shipping lines, carriers, and their agents are hereby advised to refrain from predatory, non-transparent, and opportunistic pricing practices, including the imposition of exorbitant charges, thereby taking undue advantage of the prevailing geo-political situation," the advisory stated.
"They must adhere to fair trade practices and avoid the imposition of charges that may give rise to disputes within the EXIM trade, and they must ensure that all applicable charges are clearly communicated to exporters, importers, and other stakeholders," it added.
Freight rates have risen sharply in recent days as military tensions in the Middle East continue to escalate, with Iran, the United States, and Israel attacking one another.
An executive of a global shipping company said the ongoing conflict in the Middle East is forcing companies to take longer routes to deliver shipments covering the entire African continent. This is resulting in higher fuel consumption for cargo vessels and increased operational costs.
An analyst at BigMint Research said that crude oil prices, which averaged around USD 70 per barrel before the conflict, are now hovering around USD 90 per barrel.