Container congestion driving Indian export down

The Indian exporters are facing the heat of container congestion as severe scarcity of empty containers has taken over the country. They were already struggling with skyrocketed freight rates and now the unavailability of containers has added to their misery. The small exporters are finding the freight rates to be higher than the cost of their goods.

Talking about the issue, HK Magu, Managing Director of an apparel export company said that they were somehow managing with increased freight rates but due to the unavailability of empty containers, foreign buyers are now canceling orders. He explained that several vessels have bypassed India due to a shortage of containers to be shipped out due to which the foreign buyers are either canceling orders or requesting to ship by air. Unfortunately, the air freight rates have also climbed 4 to 6 times after the pandemic.

Mr. Magu said that exporters like him who have season-based exports are paying a premium as high as 100% for getting empty containers on an urgent basis. The usual waiting period for empty containers in India is one day which has now gone to a high of 15 days after the pandemic.

Manish Shinde, a seafood exporter shared his story of struggle with container unavailability. He said that the container crisis has led to orders getting canceled and now he is left with a huge stockpile of his perishable goods. Data read that Indian readymade garment exports saw a decline of 20.75% in the last fiscal whereas the textile and apparel exports were down by 13%.

The Federation of Indian Exporters Organization (FIEO) has announced that it will soon launch a digital platform to help export business operators. FIEO is coming up with an e-module by mid of august 2021 which will provide an online platform to the shippers to put up their container requirements. The freight forwarders and shipping companies will then bid their best quotes which would ensure transparency and competitive pricing in the market.

India is not the only country struggling with the container crisis. During the pandemic lockdown, the global supply chain was disrupted and its outcome is now visible in the shape of a global container crisis.

Read the article "How the ongoing container shortage is disturbing global supply chains" on our blog to gain more insights on the topic.

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