Container shortage eases but freight rates still high

While the hurdles in container availability, which troubled exporters for several months at a stretch, have eased, the freight charges are still ruling high, and are still 40 to 50 per cent higher than last year. Container shortage and demand issues had dragged down the consolidated cargo traffic at government-run ports to a three-year low in FY21.

The government on Tuesday claimed that the shortage of containers has been eased in the country. Around 58 per cent additional exports were handled in March and around one lakh empty containers were repositioned on Indian ports from across the world by the shipping lines. The Container Shipping Lines Association (India) said it has increased availability by more than 17-18 per cent compared to March 2019.

India is also targeting to manufacture containers domestically. State-run Concor has already issued an order of 2,000 containers to BHEL and Braithwaite. Discussions have been initiated with steel manufacturers, for producing corten steel in India at competitive prices, and railway wagon manufacturers like BHEL, DCM-Hyundai and Balmer & Lawrie to set up production lines for manufacturing containers.

Though containers are now available, exporters complain that freight charges are still high. Compared to last year levels, freight charges are 40 to 50 per cent higher, said A Shaktivel, chairman of the Apparel Export Promotion Council. Some exporters suspect shipping lines have formed a cartel and are controlling the rates.

Meanwhile, the total consolidated cargo traffic handled at the government-run ports-both major and non-major ports--in FY21 dropped to a three-year low and was 5.3 per cent lower than in FY20. In volume terms, the total cargo managed at 1,248 million tonnes was 70 million tonnes lower than in FY20 and 34 million tonnes less than FY19.