Container non-availability, rise in sea freight serious concern: FIEO

NEW DELHI: Exporters said non-availability of containers and a gradual increase
in sea freights pose big challenges to the country’s outbound shipments, which
grew year-on-year after a gap of six months in September.
The Federation ofIndian Eport Organisations (FIEO) said on Wednesday that a
20-40% increase in sea freights since July and shipping lines shutting out
containers abruptly are making deliveries diicult.
“Non-availability of containers for the eport sector is posing a serious concern for
meeting delivery commitments to foreign buyers,” said Sharad Kumar Saraf,
president, FIEO.
He said for the past couple of months, despite oering space three to four weeks in advance, shipping lines have been
shutting out containers abruptly saying the vessels are full.
“Sea freights have also started increasing gradually since July and all the shipping lines have increased the freights by
20-40% depending on the destinations,” said Saraf.
Merchandise exports grew 5.27% year-on-year to $27.40 billion in September while imports declined 19.6% to $30.31
billion.
The handicraft sector is worst hit by the shortage of containers for exports at the craft clusters like Moradabad, Jodhpur,
Jaipur and Firozabad, among others. A shortage of containers at Inland Container Depot (ICD) has resulted in exporters
being asked to source the containers from nearby ICDs and hence pay a repo charge (repositioning charge).
“The charge ranges from Rs 10,000-20,000 depending upon the location of ICD. This is an additional cost which the
exporter has to bear hence increasing the transaction cost for them. Further there has been an increase in shipping
charges by around 20-30%,” said Ravi K Passi, chairman Export promotion Council for Handicrafts (EPCH).

Handicraft exports declined 34.75% on year in the April-September period.
FIEO, which expects India’s exports in the range of $290-300 billion in 2020-21, said there is a need for a regulatory
agency for the shipping sector as this important component of export logistics needs immediate attention.
“We expect that the proposed National Logistics Eiciency Advancement Predictability and Safety Act would be
formulated and implemented soon to protect the exim sector from such sudden and abrupt changes,” said Saraf.
The apex body of exporters also advocated that the government order to pay terminal handling charges to ports directly
be implemented across ports as it will bring down logistics costs for the export sector and make it more competitive.
Rakesh Kumar, Director General – EPCH urged the Government to consider establishment of a Regulatory Authority to
control and monitor the pricing, terms and conditions and other provisions relating to the shipment of goods alleging
that the current shipping lines are arbitrarily deciding the pricing and imposing conditions at their whims and fancies.