The global container shortage is a result of congestions at
Chinese ports that have been closed or operating at lower capacity after the
nation announced fresh restrictions due to Covid-19, reported The Economic
Times.
The high demand for containers in the United States and
Europe has also led to a surge in container rates. Container charges have
increased to record levels in the past 10-15 days, acceding to industry
executives who spoke to the publication.
India’s exports had hit a record high of $35.2 billion in
July 2021 — the highest-ever monthly figure in the country’s history. However,
exports now face a risk of slowing down due to the fresh shortage of containers
and a subsequent hike in freight rates.
The charges for availing a container to or from India have
increased to $7,000-$10,000, compared to $3,000-$4,000 a few months ago, as per
industry executives. However, the final cost also depends on the distance
covered.
The export industry is already feeling the heat of high
container rates amid shortage and the matter has been flagged to the central
government. The Federation of Indian Exports Organisation (FIEO) and a few
other industry bodies have informed the Centre about the hurdle, urging it to
intervene in the matter, reported ET. The industry bodies fear that India will
lose out on key exports ahead of the upcoming holiday season in the West.
The FIEO has asked the government to release approximately
25,000-30,000 containers that are lying at different ports in the country.
These containers have not been unloaded due to disputes with Customs and other
departments.
exporters’ body has asked the government to help in release these containers,
so they can be used for exports.
Some low-value export items that are exported in high
volumes have been impacted the most. The export of items includes granite
tiles, tea, rice and furniture have been hit while other categories have
completely stopped.
In view of the shortage of containers and high freight
rates, Indian exports may have dipped sharply from record levels, according to
industry experts.
Only items that have to be exported via ship or
ship-to-air have been impacted due to the container shortage. Products such as
gems and jewellery, chemicals, smartphones and leather products that are mostly
exported via air have not been impacted. Courtesy: www.indiatoday.in
