Increase in Prices of Containers
Freight price for a 20-foot container for shipments from Mumbai to Dubai has increased 25 times (from USD 10 to 250) in five months. While the freight rate for Singapore has shot up seven times, it has surged 282% and 117% for Australia and Qatar, respectively. Also, freight rates for Stockholm have jumped 185%, 181% for New Zealand, and 108% for New York. On average, the freight cost has gone up by 190% for West Asia and 159% for Europe. The inflated shipping bill has created problems, especially for farm product exporters, the majority of whom are small businessmen.
Increase Domestic Manufacturing of Containers-FIEO to Ministry of Commerce and Industry
Exporters claim that a decline in the number of vessels entering India, owing to a decrease in imports has been a significant contributor to the shortage of containers. Federation of Indian Export Organisations highlighted the issue to the Ministry of Commerce and Industry. Also, it pitched for expansion of the Shipping Corporation of India. Further, it suggested wooing private players and Indian Shipyards to increase domestic manufacturing of containers to meet the demand.
Chirag Nemani (Vimal Agro Products Pvt) stated that their orders were to reach Australia and New Zealand ahead of Diwali. However, the orders reached only after the festival due to container shortage. They are worried about their Christmas orders too. Similarly, UAE-based Lulu Group said that shipments could have been 20% higher if India would not have imposed a harsh lockdown. India’s export volume witnessed a 24% increase from July to October.
To conclude, waiting time for containers is currently more than two weeks as against two days which will affect Christmas orders.