Air cargo rates are expected to surge up to 50 percent in response to growing demand and the fear of delays as a result of the US-led invasion of Iraq.
Both EVA Airways Corp (
"Our Europe-bound cargo rates are expected to jump 45 percent to 50 percent in the near future," said Nieh Kuo-wei (
He refused to identify the exact date for new pricing, while saying the change will take place soon.
US-bound shipping costs also "have the room to grow," Nieh said, adding that a 10 percent to 20 percent increase is possible.
"EVA's air-cargo capacity is nearing maximum ... and market demand is very strong," Nieh said.
EVA operates 10 passenger flights and 12 cargo flights per week that overfly the Middle East, while China Airlines operates two passenger flights and one cargo route that may also be affected by the war.
The airlines fly to Europe either via Bangkok, India or Turkey, or via Abu Dhabi and Dubai.
China Airlines is also expected to raise cargo rates.
"We will likely increase the Europe-bound cargo fee by 20 percent within the next couple of weeks," China Airline spokesman Joseph Wu (
Demand from the information-technology and electronics sectors have triggered the price increase.
"April and May are high season for local electronics companies shipping products to European or US buyers," he said.
The fear of delays in shipments as a result of the war has prompted Western buyers to push forward shipments from Taiwanese suppliers to fill product deliveries as soon as possible, Wu said.
A spike in transportation costs will become an added burden for the local IT companies.
"The most direct war impact on the local IT sector is the rising shipment costs and longer delivery time," the Market Intelligence Center, a government-funded IT industry think tank, reported.
Over the weekend, the center released a special report on the Iraq war and its effect on the local IT sector.
Since most maritime shipments between Taiwan and Europe have to go through the Persian Gulf, rerouting via Southern Africa will delay the deliveries by about two weeks and increase marine cargo rates by 3 percent to 5 percent, the report said.
Rising insurance charges are also expected to affect local manufacturers, with shipping insurance expected to rise by at least 0.12 percent when companies pay war-related insurance fees, the report said.
"The wars impact on the nation's IT sector should be limited and local companies are not expected to lose orders because of the war, as long as the war winds down within a month," the center said.
If the war continues for two or three months and the battleground expands, however, global demand for electronics will decline and hamper local manufacturers' bottom line, the center said.
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