Cost of shipping cars has doubled in last two months

(Photo: Jordan News)
AMMAN — Head of the Jordan Free Zones Investors Commission Mohammad Al-Bustanji was quoted by local media outlets as saying that the cost of exporting cars has increased in the last two months from JD500 to JD1,000. اضافة اعلان

The reasons, he said, are Russia’s war in Ukraine, the pandemic, and the rise in shipping prices, which “all had an impact on car clearing costs in Jordan”.

According to the monthly report of the Free Zones Investors’ Authority, the number of hybrid vehicles cleared during the first quarter of this year decreased by 59.6 percent compared to the same period last year. The number of gasoline vehicles cleared by the end of last March decreased by 16 percent compared to the same period last year, and the number of diesel vehicles cleared by the end of the first quarter of this year decreased by 8.9 percent compared to the same period of last year.

Salama Al-Jabali, head of the General Syndicate of Cars Agents, told Jordan News that the increase in shipping rates will have a number of negative consequences, most noticeably, an increase in car prices and prices of nearly everything related to the commercial sector.

He added that car shipping rates have been growing for a year now, and cars are no longer as readily available as they once were. While in the past, a ship laden with cars would land in Jordan once a month, now that happens only once every three months.

Jabali added that citizens are becoming more interested in electric plug-in cars than in gasoline cars, “which have become prohibitively expensive” due to the constant rise in oil prices.

According to Jabali, while car prices vary depending on the type and accessories included in each vehicle, “shipping charges are solely determined by the cubic meter calculation”.

Economist Muflih Aqel said that the issue is not just about rising transportation charges and their frequent fluctuation, but also about a decrease in the number of imported vehicles.

It is not solely a Jordanian problem, “but one that affects the entire world. Waiting for a car in Saudi Arabia, for example, can take up to six months”.

The shortage of some electronics and equipment for the auto sector, as well as expensive manufacturing and shipping costs are two major reasons hurting the automobile market, said Aqel, who blames that also for the decline in the number of cars produced by firms like Mercedes and Toyota.

“This results in a scarcity of cars and a low demand for their purchase, which may be good news for used car dealers,” he said.

The shortage of certain car components, according to Aqel, is due to the fact that the car electronics sector is based in Taiwan and China only, making worldwide demand difficult to provide. This limits commercial operations, he said.

Moreover, “there was a halt in production during the COVID-19 pandemic, after which demand and commercial activity increased significantly, resulting in increased demand for ships and transport vessels, which led to a significant increase in their wages, especially after they were forced to wait for long periods of time in shipping ports until they unloaded or loaded their shipment, due to heavy congestion”.

The Russian-Ukrainian conflict is responsible for the spike in fuel prices, which has increased transportation expenses, said Aqel, adding that “this situation will not change anytime soon since the warring parties are attempting to win at all costs, regardless of the measures employed, and as a result, the global economic situation will remain in jeopardy and continue to deteriorate”.

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