Shortage of Shipping Containers Threatens Indian Export's Revival

The shortage of shipping containers may cause a big issue for the Indian exports sector. This creates a topic of concern as there aren’t enough shipping containers to get the goods across the sea. Shipments of certain goods, especially sales of packaged foods, had surged in recent months as more people are having food at home during lockdowns, boosting expectations of a busy Christmas season. But the global impact of the coronavirus on trade and a slump in Indian imports have led to a shortage of incoming shipping containers, boosting freight charges about seven times.

Vimal Agro Products, which exports goods like canned mangoes and pickles to the Indian diaspora expressed its concern towards the issue of shortage. Chirag Nemani, VP Marketing and Sales, Vimal Agro Products said “Orders that were intended to arrive in Australia and New Zealand in time for Diwali reached only after the festival. While the company can’t share details on Christmas orders due to client confidentiality, there’s concern of a ‘big impact’ if the container shortage persists”. He further said “Empty containers were easily available earlier but now that is a big issue. Customers don’t want delay”.

Orders that were intended to arrive in Australia and New Zealand in time for Diwali reached only after the festival

India’s exports in terms of volumes grew 24 percent in July-October, while imports reduced 28 percent from the previous year. Due to this, companies which used to ship out empty containers from India had 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.

Vimal Agro’s freight costs have doubled to $1,800 per container for the UK and charges have gone up three times to $1,500 for Australia. Capital Ventures, which sells spices, bakery goods and staples under the Parliament brand, is paying $200 for Singapore where it was earlier $20 and $700 instead of $200 for Dubai.

Organic Tattva, which is reporting a 50 percent increase in sales of organic foods to retailers including Costco Wholesale Corp. and the UAE-based Lulu Group, said shipments would have been 20 percent higher if it weren’t for India’s harsh lockdown that hit the availability of manpower and now the container shortages. The US contributes 40 percent of the company’s revenue. “The shortage of containers started a few months back and has exacerbated in the last few weeks,” said Manish Sharma, a partner at PwC India. “Unfortunately, this has come even as our exports were picking up, so on top of an economic shock we now have a logistics-induced challenge” he adds.