Container crunch hampers smooth return to export

With Covid-19 related lockdowns lifted, and the market slowly opening up, especially buoyant with the vaccination drives the world over, the import-export market is facing a new challenge — rising cost and unavailability of ocean freight containers. While the shortage has acutely affected print businesses which export their products, industry insiders are citing this as one of the reasons for the recent paper price hike by the companies.

13 Feb 2021 | By Dibyajyoti Sarma

Pre-pandemic the cost of a container was USD 850 and now it has increased to USD 2,000

The country has been facing the issue since it went to lockdown in March 2020. Ever since Covid-19 disrupted global supply chains and trade, exporters who send goods via ports, especially on the east coast, have been facing severe container shortage and congestion at transhipment ports such as Colombo, Singapore, Hong Kong and Klang. East coast ports handle around 30% of India’s container throughput. As more and more companies work to fulfil orders for the current financial year in the next two months, the shortage of containers is bound to rise.

Industry experts say rebound of India's external trade would have been quicker but for the shortage of containers.

Ports handle around 95% of India’s international trade volume, in FY2020, India’s major ports handled 704.82 million tonnes of cargo, a CAGR of 2.74% during FY2016-20. In FY2020, container traffic in India’s major ports reached 9.98 million TEUs, a growth of 1.12% year-on-year. Total 28 to 30% of India’s container throughput is handled by East Coast ports.

However, there are global reasons too behind the shortage of containers. During the pandemic, shipping lines released all large ships which they had contracted. So, there are not sufficient large ships calling on those ports to take those containers.

The result is the rise in prices. Pre-pandemic the cost of a container was USD 850 and now it has increased to USD 2,000.