Rates could increase by 30 per cent
A hike in Far East shipping rates this summer could cost UK retailers more than£500 million.

The news comes just days after the European Union vowed not to impose restrictions on textile imports from China after 2008, putting an end to the so-called bra wars fiasco.

The Far East Freight Conference (FEFC), which governs the region's shipping tariffs, plans to increase rates on routes between countries such as China, Hong Kong and Vietnam and northern Europe by 30 per cent on July 1.

The levy equates to an additional US$250 (£133.36) charge for each 20 ft container.

An increase will hit retailers from all sectors that source products in the region. But fashion players, keen to profit from the region's cheap materials and manufacturing, could be hardest hit by the levy.

In a further squeeze on retailers, the FEFC is tipped to introduce a peak season surcharge of US$90 (£48) per container on routes into northern Europe for three months starting in August.

Nick Jones, managing director of supply chain management company Redfern International, said: 'Larger retailers like M&S may be protected from these increases by year-end deals, but the majority of the market works on three-month contracts.'

Jones warned retailers to make provisions, because both increases may affect margins in the run-up to the crucial Christmas trading period.

A supply chain source close to the situation said: 'The consequences could be much worse than bra wars.'

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