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

New Delhi: Amid growth in India’s exports, exporters have said that non-availability of containers and a gradual increase in sea freights are posing as big challenges for the country’s outbound shipments.

“Non-availability of containers for the export sector is posing a serious concern for meeting delivery commitments of foreign buyers,” said Sharad Kumar Saraf, president of Federation of Indian Export Organisations (FIEO).

He said that from the last couple of months, in spite of offering space for three to four weeks ahead, shipping lines are shutting out the containers abruptly giving reasons that the vessels are full.

“Sea freights have also started increasing gradually since July and all the shipping lines have increased the freights by 20% to 40% depending on the destinations,” Saraf said.

The concerns have been flagged at a time when India’s exports grew year on year after a gap of six months in September, driven mainly by engineering goods, petroleum products, pharmaceuticals and readymade garments.

Merchandise exports rose 5.27% on year to $27.40 billion in September while imports declined 19.6% to $30.31 billion.

FIEO, which expects India’s exports in the range of $290-300 billion in 2020-21, said that there is a need for a regulatory agency for the shipping sector as this important component of export logistics needs immediate attention to be able to capitalize on the new opportunities.

Among major countries, India’s exports to China (20.78%) and the US (15.54%) grew at the fastest pace in September. Out of the top 10 export destinations, shipping to only the UAE and Hong Kong declined year on year in September.

“We expect that the proposed National Logistics Efficiency Advancement Predictability and Safety (NLEAPS) Act would be formulated and implemented soon to protect the exim sector from such sudden and abrupt changes,” Saraf said.

The apex body of exporters also advocated that the government order to pay terminal handling charges to ports directly, may be implemented across ports as it will bring down logistics costs for the export sector and make them more competitive.

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