Container crunch roils India trade, putting nascent economic recovery at risk
A recent revival in Indian exports is under threat because 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 eat 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 Pvt., which exports goods like canned mangoes and pickles to the Indian diaspora, said orders that were intended to arrive in Australia and New Zealand in time for Diwali reached only after the Hindu 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, according to Chirag Nemani, vice president for marketing and sales.
“Empty containers were easily available earlier but now that is a big issue,” Nemani said. “Customers don’t want delay.”
Global trade is being roiled by a shortage of containers because dire predictions of a collapse this year that prompted carriers to cancel sailings have proved too pessimistic. India’s situation is worsened by geopolitical tensions with China that have reined in imports — and subsequently incoming containers — even while exports are recovering.
India’s exports in terms of volumes grew 24% July-October, while imports reduced 28% 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.
