Logo of Phnom Penh Post newspaper Phnom Penh Post - Freight rates ‘begin descent’

Freight rates ‘begin descent’

Content image - Phnom Penh Post
Heavy lorries carry goods along Win Win Boulevard in Trapaing Krasaing commune of western Phnom Penh’s Por Sen Chey district on September 27. Heng Chivoan

Freight rates ‘begin descent’

Freight rates in Cambodia have started to recede gradually as declining international oil prices drive down local retail fuel costs, which will enhance the competitiveness of the Kingdom’s products on international markets, industry insiders have said.

International oil prices have fallen to levels seen in the days prior to February 24 – when Russia began a military offensive in Ukraine – amid growing fears that a looming recession would drastically reduce fuel demand.

At 1057 GMT on August 8, the October contract of Brent futures was at $93.84, down $1.08 or 1.14 per cent from its previous close, while US West Texas Intermediate (WTI) fell to $88.05, with the September contract down $0.96, or 1.08 per cent, according to Investing.com.

In Cambodia, retail fuel prices reached a peak in the June 21-30 period, with regular-grade petrol and diesel at 5,800 riel ($1.43) and 6,300 riel ($1.55) per litre, respectively. These have since dropped by 18.10 per cent and 18.25 per cent to 4,750 riel and 5,150 riel for the August 1-10 period.

Cambodia Logistics Association (CLA) president Sin Chanthy confirmed to The Post on August 8 that a number of transport companies in Kingdom have started to scale back shipping rates, with intent to return to levels seen prior to the Ukraine conflict, for the “benefit of transporters, consumers and other stakeholders”.

Low freight rates not only stimulate domestic and cross-border shipping, but also bring down transportation costs associated with exports, thereby allowing more Cambodian goods to reach international markets.

He shared that many CLA member companies are still considering lowering their shipping rates “in the near future, in line with international oil prices”.

However, providing a dose of realism, Chanthy stressed that a more protracted downtrend is uncertain, given the continued impact of Covid-19 and other global crises.

Similarly, Logistics and Supply Chain Business Association in Cambodia (Loscba) president Chea Chandara views the sustained decline in international oil prices as a “positive sign” for the transport sector and economic growth for oil-importing countries like Cambodia.

Lower oil prices will not only improve travel and transportation, but also cut down costs linked to production such as electricity, and expand export capacity, he explained, echoing Chanthy’s comment that the Ukraine conflict and other international factors make estimating the extent of the ongoing oil price slump difficult.

Nonetheless, a further dip in oil rates and significant improvements in the Covid situation would help revitalise the Cambodian tourism sector, Chandara stressed.

Data by the General Department of Customs and Excise showed that in the first half of 2022, Cambodia’s international trade totalled $27.244 billion or 20.16 per cent more than the corresponding period last year.

Of that, imports grew 11.91 per cent to $15.865 billion, while exports were valued at worth $11.379 billion, up 33.91 per cent. The Kingdom’s trade deficit for the first half narrowed by 21.01 per cent year-on-year to $4.486 billion.

MOST VIEWED

  • Research key to Kanitha’s rep for expertise

    Sok Kanitha is used to weighing in on controversial issues using a confident approach that signals expertise and authority, and a recent video she made was no exception. Her “Episode 342: The History of NATO” video went live on January 16, 2023 and immediately shot to 30,000 likes and 3,500

  • Cambodia maintains 'Kun Khmer' stance despite Thailand’s boycott threat

    Cambodia has taken the position that it will use the term "Kun Khmer" to refer to the sport of kickboxing at the upcoming Southeast Asian (SEA) Games, and has removed the term Muay from all references to the sport. Despite strong reactions from the Thai

  • Knockout! Kun Khmer replaces ‘Muay’ for Phnom Penh Games

    Cambodia has decided to officially remove the word Muay from the programme of the 32nd Southeast Asian (SEA) Games 2023 in May. “Kun Khmer” will instead be used to represent the Southeast Asian sport of kickboxing, in accordance with the wishes of the Cambodian people. Vath

  • Artificial insemination takes herd from 7 to 700

    Some farms breed local cows or even import bulls from a broad for the purpose of breeding heavier livestock for meat production. One Tbong Khnum farmer has found a more efficient way. Hout Leang employs artificial insemination to fertilise local cows. Thanks to imported “straws”

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and