Short term relief soon for Indian exporters amidst container crisis

A ray of hope for Indian exporters is expected in the current week as the Commerce Ministry in India has assured that they will announce short-term measures to ease the situation of acute container shortage and skyrocketing box prices caused by the Covid-19 pandemic.

India’s Commerce Secretary BVR Subrahmanyam stated to the media that the Central government is brainstorming the options put across by the export body and private players to come up with a solution for the ongoing container crunch.

Federation of Indian Exporters Organisation’s (FIEO) Director General and CEO Dr. Ajay Sahai spoke in detail with Container News about the grievances and suggestions that FIEO proposed to the Indian government and asked for its prompt intervention.

“There are around 30,000 odd containers which are at different ports either because the importer has not taken the delivery or there is some dispute on customs duty or classification. We have suggested the government that these 30,000 containers be offloaded at various warehouses and can add them to the supply chain to help in exports,” said Dr. Sahai.

Secondly, the export body has requested the government to regulate the export of empty boxes so that only filled containers move out of the country and the empties are put back in the system.

Dr. Sahai noted that “a lot of empty containers are being taken out of the country because we are still exporting low-value high-volume goods. Every ship has a weight restriction so with a lesser number of containers if the ship reaches the weight limit, it encourages them to take the empties because they have the space but also have the weight restriction”. The export of granite tiles, tea, rice and furniture have been hit while other categories have completely stopped.

“The third request that we have made as an immediate step is to bring in 1 million containers from different parts of the world. In the second wave also the shipping companies helped us with similar support by bringing containers from the East and the West coasts”, said the FIEO CEO, who added that the long-term solution will remain manufacturing containers on home soil.

It is expected that along with importing containers to India, the government could ask shippers to charge the floor price for containers as freight charges.

Industry players felt the jitters when recently the charges of carrying a container from or onwards to India hovered around US$7,000 to US$10,000, while eight months ago the prices were between US$3,000 and US$4,000.

Speaking on the cost factor that would play out for offloading cargo in various warehouses and importing containers, Dr. Sahai said the industry will bear the increased cost because there is a choice to be made between solving the non-availability of containers and high freight rates.

FIEO Chief Chairman, Dr. A Sakthivel also told Container News that they took the matter to Delhi and the government has given a positive response to the grievances of the export body.

The commerce ministry of India is expected to hold a meeting with the shipping ministry, shipping lines, agents and industry players like Concor, today (9 September) to chart out a relief plan for the exporters as the government expects to come out of this situation by the first quarter of 2022.

Sheuly Ghosh
Indian Correspondent