Rising sea freight rates a cause of concern — textile syndicate

AMMAN — Global sea freight rates have increased by more than 400 per cent this year, according to the Jordan Textile and Readymade Clothes Syndicate.

Sea freight rates began to surge three months ago, particularly from Chinese ports, where they increased “consistently and dramatically”, doubling over the past three months, according to Jordan Textile and Readymade Clothes Syndicate President Munir Deyyeh.

He said that freight prices have risen significantly in tandem with the cost of raw materials for most commodities in most countries. 

“As we rely on imports for most consumer products, this will have a noticeable negative impact on the Kingdom’s economy in the near future,” Deyyeh told The Jordan Times on Tuesday.

Deyyeh said that there will be a definite rise in prices as well as a shortage of some goods.

“We have provided the government with various solutions and suggestions to get out of this dilemma as quickly as possible so that the country’s economy would not be negatively impacted.

“Our suggestions include lowering the sales tax, excluding freight expenses from the calculation of customs and tax duties on imported goods and eliminating the 5 per cent customs service allowance fee,” Deyyeh noted.

The syndicate president highlighted the importance of the government’s efforts to reduce costs and encourage imports to fill any potential shortages of products and to keep commodities at reasonable prices in the local market.

A “clear economic crisis is looming on the horizon”, according to Deyyeh, resulting from the effects of the pandemic, therefore, the government must intervene and have the tools and the courage to take decisions to mitigate the impact of this economic crisis”.

Deyyeh noted that due to the pandemic, many countries have slowed production for long periods of time of fear of a global economic slowdown, putting enormous pressure on China to meet the world’s needs, which resulted in price increases.