Exclusive | Emergency steps to stem container crisis expected by early next week

"After a meeting chaired by the Cabinet Secretary last week, a series of meetings had been taken by senior officials at the shipping and commerce Ministries. A number of short term-measures are being finalized. This includes extending the Transport and Marketing Assistance (TMA) for Specified Agriculture Products, so that crucial agricultural trade doesn't stall," he added.

The TMA provides financial assistance to agri exporters for international freight and marketing of certain agricultural products, trans-shipment costs of which are high due to perishability. The scheme was valid until March 2021, but is likely to be extended by a year.

The government will work with the Container Shipping Lines Association (CSLA), which represents the foreign shipping companies operating in India, to create guidelines for quick quarantining of incoming ships so that containers can be quickly used.

Rather than directly loading up freight trains with containers, using more railway wagons and lowering haulage charges is also planned to ease the logistic chain and address demand. Customs Departments at important ports like Nhava Sheva, Kochi and Haldia will also be given new guidelines that further reduce turnaround times at ports.

Short-term solutions such as providing priority berthing to bulk carriers to reduce turnaround times and special drives to expedite clearance of unclaimed cargo and increase the availability of containers are also planned, another official said. However, many of these measures had been tried before as well. In April, the government had announced the first container crisis to be over, having met its target of repurposing existing containers and meeting the market demand.

Long-term solutions such as ramping up container manufacturing are also in progress with manufacturing units to be set up in Bhavnagar, Gujarat. Currently, no containers are manufactured in India, which requires an estimated 3.5 lakh containers every year. To reduce dependence on Chinese and Korean containers, 10 locations have been chosen by the Shipping Ministry for manufacturing.

"In the past decade, containerization of agricultural commodities has eaten away precious cargo space. Today, there is no shortage of bulk carriers. We will hold a meeting with export promotion councils to change the trend," the official mentioned above said. Availability of containers for export of tea, coffee and spices, especially from ports in South India such as Kochi, Chennai and Mangalore, has been identified as a long-term issue by CSLA due to import deficit at these ports.

Stranded in China

Similar to last year, a series of lockdowns in major eastern Chinese cities such as Shenzhen and Shanghai has aggravated the situation. China is the world's largest buyer of merchandise goods as well as the largest exporter by volume. But the country is battling a fresh outbreak of COVID-19 infections in major cities along with a spate of order cancellations from struggling Southeast Asian economies.

"Therefore, while it continues to import goods, exports from China have stagnated in recent months as factories have cut production owing to stricter operational guidelines for COVID-19. As a result, large numbers of inbound containers are left stuck at Chinese ports as they can't be loaded up with exports," he added. Chinese exports grew by a lower than anticipated 19 percent in July even as imports remained strong at 28 percent.

The Federation of Indian Export Organisations (FIEO) had created an online marketplace for shipping containers this year. However, the system has been unable to deal with the national demand for containers.

"Augmenting the flow of empty containers and establishing a regulatory authority to seek justification of freight hike and imposition of various charges by the shipping lines need urgent intervention of the government," FIEO President A Sakthivel, said.