“A sharp increase in Ocean Freight and Air Freight bound for world wide destinations put Exporters and Importers to hold their shipments at a toss making huge losses.

Currently Exporters are need to wait 2-3 weeks for shipment even though paying high freight rates. Apart from this, the Exporter need to shell out additional freight premium also to secure space for loading his cargo on the ship.

There is tremendous shortage of containers with shipping companies thus triggering freight rates increase more than 125% therefore widening the gap between demand and supply increased. It’s probably due to major transhipment port like Colombo, Port Klang, Singapore and Salalah are highly congested therefore  ship berthing time at these ports are increased to

10-15 days. Also there are many end destination ports are congested which effecting the entire supply chain and turn around time of the containers. The other important concern is that ship allocation from/to India is reduced due to higher export from China to USA and Europe with high freight rates (Current rate from China to USA is approx. $ 10000 per TEU and Europe $ 9000 per TEU) which is encouraging the shipping companies for repositioning empty containers from India to China to get higher freight rates. The current ocean freight  from

India to USA is approx. $ 3500 per TEU and Europe  $ 2500 per TEU. 90% of shipping companies operated from/to India are owned by Foreign companies thus intervene of the Government is at very lower level even though the issues are taken up with Commerce Ministry. However it’s again a Global Logistics Pandemic, it’s necessary to take up the issues globally and strongly to ease the trade. It’s foreseen that existing trend will continue for a longer period in 2021.

Current situation forced the Exporters to execute only his emergency orders by paying higher logistics cost and many export orders are getting cancelled or postponed due to additional freight rates incurred. Nevertheless to say, higher freight rates also a big challenge to Logistics Service Providers for their high investment in the industry. The Current budget has reduced import duty for some products like Stainless Steel, Solar, Steel Scraps etc.. and this may increase more imports to India and generate more containers inventory and hope to reduce the freight rates soon.” said, Mr. Rajan Nair, Alltime Shipping.

Source:- dst.news