India’s sudden export rise and less import have created the shortage for the containers. This container shortage is hurting exporters, who are trying to take advantage of economic recoveries in other countries.
According to the industry experts, the waiting time to get a container for exporters is now 14-20 days, which was maximum of four days earlier. Prices for a container are also doubled and need three-week early booking to the destinations such as the US and Africa at some Indian ports, said exporters.
India’s Covid-19 lockdown has led the industry to container shortage as demand in India was low. Usually, the containers that come in for import are shipped out for exports. During the lockdown all trades were down, so the shipping lines had cut capacity and road transportation like trucks were also unavailable. Also, clearances took longer (especially from China) because of worsening trade relations between the countries.
Now, due to Indian Festive session on and Chinese new year holidays, it seems difficult to regularise the situation until February 2021, Industry executive said. Also, the situation is unlikely to ease soon with consumer demand still muted as India battles to rein in the virus.
The severe space problem over the past few weeks was the result of increased demand, reduced imports and port rotation issues.
Covid-19 lockdown created idling of vessels which they have re-routed to more profitable trades on the transpacific, leading to supply and demand gaps for major intra-Asia trading routes.
Due to lack of containerships calling at Indian ports, many carriers have cut short their container lease positions, which has created a shortage and led to additional costs and time to reposition boxes.
Points to notice:
The space issues and shortage of equipment from all shipping lines are expected to continue for the next two to three months.
India to major destination bookings is also facing delays, with rates almost double pre-Covid-19 levels.
There’s a waiting period of three to four weeks at Colombo and other transhipment ports resulted in congestion and rate increase.
Such a large increase in freight rates impacting the competitiveness of Indian exporters.