The Intra-Asia Discussion Agreement (Iada) has recommended its members increase ocean-freight rates by US$30 to US$100 to compensate for the drop in southbound trade within Asia. In some cases, the agreement has proposed members impose a minimum rate. Iada spokesman Roberto Giannetta said the proposals were made because the volume of southbound cargo between Japan, Hong Kong and South Korea to Southeast Asia had fallen significantly in the past three to four months due mainly to the currency crisis. This imbalance has resulted in an acute shortage of containers for exports or northbound trade in the intra-Asia region. 'The rate increases are necessary because the lines need to reposition equipment to handle a surge in exports,' Mr Giannetta said. While a carrier can offset shore charges with the terminal handling charges when it carries a loaded container, the carrier has to absorb handling costs if containers are empty. The agreement, which made the recommendations for rate increases and minimum freight charges after a series of meetings earlier this month, said it was up to individual lines whether to follow the guidelines. 'Some lines have already imposed the rate increases from April 1 on services between Taiwan and Hong Kong,' he said, adding that the recommendation was US$20 per teu (20 ft equivalent units) and US$30 per feu (40 ft equivalent units). Iada has recommended that freight rates rise US$50 per teu and US$100 per feu for exports from Hong Kong to Japan, US$30 per teu and US$50 per feu for exports from Taiwan to Japan, and US$50 per teu and US$100 per feu for exports from Thailand to Japan. The proposed rate rise for exports from Malaysia to Vietnam, and from Indonesia to China and Vietnam, is US$50 per teu and US$100 per feu. A similar fee increase has been proposed for trade between Thailand and Japan, Korea, Hong Kong, Taiwan and the mainland. All increases will be effective from May 1, except for exports from Thailand to Japan, where increases will begin on June 1. As South Korea is facing a currency crisis, there is little cargo entering the country, and Iada has decided to recommend a minimum charge of US$350 per teu and US$600 per feu to stop the downward spiral of the rates for exports to Korea. A similar minimum rate of US$400 per teu and US$600 per feu has been imposed on exports from Malaysia to Japan, and US$700 per teu and US$1,000 per feu for exports from Indonesia to Japan. Freight rates are said to have fallen by as much as 20 per cent in the past eight months. Mr Giannetta said it was the shipping lines' choice whether to reduce rates in the future. Kuehne & Nagel's chief executive for Asia-Pacific Klaus Herms said shipping lines had seen freight rates decline between 1991 and last year and they would have to rise or some lines would have to go out of business. There are indications of this already as some lines have introduced increases this month and others plan increases on either May 1 or July 1. The freight rates on the Asia-Europe trade are to be increased by US$100 to US$150 per teu. Kuehne & Nagel director of sales and marketing Asia-Pacific Jan Lyngdam said somebody had to pay for the repositioning fee because exports outstripped imports. Mr Lyngdam said past attempts to increase rates had not been successful because of new alliances coming into the picture, forcing carriers to hold off rate increases to avoid losing business to rivals. The Transpacific Stabilisation Agreement also announced a HK$75 rise in terminal charges for teus and a HK$105 increase for feus from May 1.