Copper prices are set to climb, bottom lines of petroleum companies will be squeezed, and manufacturers of consumer electronics durables are starting to feel the pinch.

All this is the outcome of a surge in shipping rates over the past year. In the case of dry bulk rates, the northward movement has continued in the last two months.

Rates of dry bulk carriers have more than doubled from about $32,000 a day in mid-September 2003 to about $65,500 in late October 2003. The Baltic Dry Index, an index of dry bulk rates, touched a three-year high on November 3.

Rates of very large crude carriers rose from around $33,200 a day in October 2002 to around $48,550 in September 2003. Suezmax tanker rates climbed from $21,000 a day in October 2002 to about $24,000 in September 2003.

What is more, the rates could go up further. The demand for crude tankers is expected to rise in winter. The rise will depend on the severity of the winter.

However, the order book for tankers, which is at record levels, may check the rise in rates. Shipping lines will be increasing their fleets in the next few months.

However, dry bulk rates could climb in the next few months, thanks to the global economic recovery, China's economic growth and the rising demand for steel in China, an analyst said.

The surge in freight is pushing up costs in several industries -- petroleum, copper, steel and consumer electronics, among others.

"The rising shipping freight will have an impact on the petroleum industry as the country imports 70 per cent of its crude requirements. However, there will not be any increase in retail prices of petrol or diesel owing to political compulsions, and the oil companies will have to absorb the rise in rates," said a senior executive of a oil company on condition of anonymity.

Noted P Sugavanam, director (finance) at Indian Oil Corporation: "Any increase in freight usually gets absorbed in the gross margins. Freight is barely 5-6 per cent of the total crude cost. Hence, costs per barrel may go up 3-4 cents or a maximum of 10 cents." There was an impact on margins in the long run, he said, adding that it was not too high.

Still, analysts who track the oil industry believe that though the oil companies will not raise the prices of transportation fuels, they will eventually pass on the higher cost to the public by raising the prices of fuel.

Said an analyst: "Any absorption of the freight price hike in the case of petrol and diesel will result in an erosion of marketing margins by at least 20 per cent."

Jivan Mukhopadhyay, an economist at the Tata group, pointed out that the appreciation of the rupee against the dollar had offset the rise in freight rates to an extent.

Between October 1, 2002, when the rupee-dollar exchange rate was 48.35, and September 30, 2003, when the exchange rate was 45.83, the value of the rupee appreciated 5.5 per cent.

Even so, the impact of the jump in freight rates could be severe on copper producers. Sterlite Industries, for example, imports copper concentrate from Australia and Southeast Asia, but has absorbed the rise in freight costs so far.