Container shortage woes India's export sector

After China, the next country to be badly hit because of container deficiency in the post-pandemic era in India. The reason: low imports and obviously, China.

The pandemic had devastated the Indian economy inside out. The country recorded a 23.9% constriction in GDP, the biggest among all major G20 countries. However, in the next quarter, the economy reworked quickly as lockdown restrictions eased nationally.

Shipments of certain goods, particularly sales of packaged nourishment, had spurted in the last few months as more and more Indians eat at home during lockdowns, boosting expectations of a busy Christmas season. But COVID, along with a slump in imports is leading Indian manufacturers to face the heat of container shortage.

As you might know, the Transpacific route is currently facing one of the worst container shortages ever since containerization transformed the shipping and logistics industry. Dire predictions of a collapse in a trade this year prompted carriers to cancel sailings, a move that has proved to be too pessimistic.

What's worse is, the ground situation in India worsens every day with the current geopolitical tensions ongoing between India and China, with the former rallying increasingly on low reliability on China for imports.

Lower imports automatically translate to a lower number of containers coming into the country. On the other hand, Indian exports are slowly recovering to pre-pandemic levels.

India’s exports in terms of volumes thrived 24% July-October, while imports curtailed by 28% from the same period the previous year. This forced companies that used to ship out empty containers from India to now bring them into the country and move them inland where factories are located at a huge cost, according to the country’s Container Shipping Lines Association.

The result: charges for almost all routes have nearly tripled. From India's Jawaharlal Nehru Port or JNPT, Vimal Agro’s freight costs have doubled to $1,800 per container for the U.K. and charges have gone up three times to $1,500 for Australia. Another company, Capital Ventures, is currently paying $200 for Singapore where it was earlier $20 and $700 instead of $200 for Dubai.

Currently, the waiting time for containers is two weeks or more, while normally it is 1-2 days.

In countering the ongoing crisis, the Indian government has ordered shipping lines to reposit 100,000 containers for the same.

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