January 05, (LBO) – Sri Lanka’s clothing exporters are protesting against shipping lines’ decision to increase fees for handling goods out of the island by as much as 35 percent.

Starting January 1, the Terminal Handling Charge or THC for a 20 foot container goes up from 115 dollars to 155 dollars, while 40 foot container costs 32 percent more at 245 dollars, the Joint Apparel Association Forum (JAAF) said Friday.

A 45 foot dry cargo container now costs 295 dollars.

"Time and again shippers have pointed out that this is a totally unconscionable and illegal charge and an anti-competitive practice resorted to by carriers to maintain their freight rates and avoid competition," JAAF, an apex body of the apparel industry said.

Over 50 percent of the island’s export earnings come from the 2.7 billion dollar garment industry, which has carved out a niche to turn out top quality apparel and exotic lingerie in quick time.

Faced with regional competition and out priced by giants like China and India, Sri Lanka’s is under tremendous pressure to cut costs and is now falling behind in the global race, with exports to the US, dropping one percent as at end September 2006 to 1.2 billion dollars.

Sales to Europe however, surged by 12 percent to 832.7 million dollars in 2006 over the same period 2005, as Sri Lankan garments benefit from a scheme called GSP plus that gives duty free access to the EU.

JAAF says over 90 percent of the local exporters are forced to hand over goods to the shipping lines nominated by the buyers who sign contracts with the lines. The apparel industry would plunge into further difficulties if a solution is not found to maintain the island’s competitiveness, JAAF warns.