Freight firms fear extra security will eat into dwindling profits

Dubai: Freight forwarders and logistics companies in the UAE are fretting over high costs of installing mandatory security equipment and declining profit margins due to escalating expenses.

Governments across the world are introducing new security regulations to make movement of sea and air cargo safer.

Airlines, shipping lines and logistics companies are being told to acquire advanced equipment like x-ray machines and surveillance cameras to ensure that terrorists do not use global transportation system to ship illicit cargo.

"The costs involved are phenomenal. The industry will have to pass a lot of this cost to customers and some will be absorbed by companies," Eisa Baluch, chairman of Dubai-based Swift Freight, told Gulf News.

There are no estimates of security-related investment that the logistics industry in the UAE will have to make.

In the European Union countries, an estimated 35 billion euros will be spent in the coming years on air and sea transport security, according to Manfred Boes, president of the International Federation of Freight Forwarders Associations (FIATA).

Average annual spending on maintenance and training for each European company in the logistics sector will 150,000 euros, he added.

"Somebody has to pay for this and it is going to be the customer," Boes told reporters in Dubai.

These issues will be high on the agenda of the FIATA congress being held in Dubai from October 18 to 22.

Baluch said local freight forwarders will have to study their costs in consultation with government officials.