Increasing freight costs, container shortages threaten exports: GTRI

“The possession of delivery containers is controlled by major shipping lines and renting firms with minimal share of India. Firms like Maersk (Denmark), Mediterranean Shipping Business (Switzerland), and CMA CGM (France) are amongst the top proprietors of containers, with millions of TEUs (Twenty-foot Matching Units) in their fleets,” the GTRi stated.

It claimed that in 2022, the ordinary price was $ 4,942 due to the lingering results of the covid pandemic, while by 2024, the price had actually maintained around $ 4,775, it claimed adding that these rates are still substantially more than pre-pandemic levels, where the price was $ 1,420 in 2019.

“India can lower its danger of worldwide supply chain disruptions by enhancing domestic container manufacturing, motivating the use of in your area made containers, and boosting the use of Indian shipping business for transferring goods,” GTRI Founder Ajay Srivastava claimed.

“Indian suppliers encounter manufacturing prices of $ 3,500 to $ 4,000 per 40-foot container, which is greater than China’s cost of $ 2,500 to $ 3,000. Consequently, Indian businesses stay based on imported containers, primarily from China. This reliance makes the nation susceptible to international supply chain disruptions,” Srivastav stated.

India depends heavily on containers made in China, making it susceptible to supply disturbances and price fluctuations, it claimed adding “India’s dependancy on major delivery hubs and international providers significantly boosts expenses and risks”.

To attend to these obstacles, the Global Trade Research Study Campaign (GTRI) advised that India carry out several techniques to boost residential container manufacturing, boost the duty of neighborhood shipping companies, advertise use residential containers, and enhance regional delivery firms.

Along with container shortages, India is greatly dependent on international delivery business for its worldwide profession. Concerning 90-95 percent of India’s total freight is lugged by foreign lines, such as Maersk, MSC, and COSCO. Indian shipping business, led by Shipping Company of India (SCI), handle only concerning 5-10 per cent of trade by volume, it stated.

He added that there had been unproven reports of China hoarding containers to optimize its exports to the US and Europe in advance of prospective trade limitations and a walk in tasks on solar panels, electrical automobiles, steel and aluminium manufactured by Chinese companies located in China or elsewhere like in ASEAN (Association of Southeast Asian Nations) countries.

“This reliance on international shipping subjects India to climbing freight costs, geopolitical dangers, and logistical unpredictabilities. With escalating profession tensions between the US and China, and the raising expense of delivery, India should urgently develop its domestic shipping industry to handle a bigger share of its export and import freight,” it included.