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Govt confident of having overcome severe shortage of shipping containers

The crisis began in late 2020 due to a sharp mismatch in import and export volumes, port congestion across the Asia Pacific region due to Covid-19, and restrictions on trade

April 30, 2021 / 01:44 PM IST
Representative image

Representative image

The government is confident that the acute shortage of standard 20-feet equivalent unit shipping containers that had gripped India and the world earlier this year, has been sorted out with a mix of measures undertaken on the policy and industrial sides.

As a result, the Commerce Ministry has suggested that emergency norms introduced to ease the crisis instituted last year may now be rolled back.

After the government swung into action, a massive drive was undertaken in association with shipping lines led by the Container Shipping Lines Association (CSLA), India, to reposition as many as 1 lakh empty containers in India on an urgent basis, according to the Commerce Ministry.

The government had also reduced the mandatory quarantine period for ships coming from China to 5-7 days, down from the earlier 14 days. This has reduced the lead time in repositioning of empty containers.

"Specific actions to squeeze every bit of the supply chain helped overturn the crisis. We launched a special drive to expedite clearance of unclaimed or uncleared cargo, leading to more than 2,000 empty containers being released. The logistics division of the Ministry also created the demand projections of empty containers and circulated it to the shipping lines, offering them clarity on the actual demand for empty containers nationwide," a senior official said.

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Norms such as ports being asked to provide priority berthing to break-bulk carriers, especially for agriculture exports such as sugar, railways providing unhindered supply of wagons and lower haulage charges to carry goods to and from the hinterland, may now be reverted back to normal, sources say.

The government assessment of the crisis is also borne out by data from the Federation of Indian Export Organisations (FIEO), which shows that the issue has been straightened out.

"We are only seeing some minor shortage of available containers to transport food and agriculture produce, which may also be soon rectified," a senior functionary of FIEO said.

To overcome the spiraling shortage, FIEO set up an online first-level marketplace for containers bringing together both exporters and shipping lines, aimed at easing the flow of outbound goods. "Exporters could post their container demands online. All such requirements are also made visible to shipping lines, freight forwarders and others so that they can express their interest to fulfil such demands," the functionary said.

Availability of containers for export of tea, coffee and spices, especially from ports in South India such as Kochi, Chennai and Mangalore, have been identified as a long term issue by CSLA due to import deficit at these ports.

The majority of global merchandise trade is dependent on standard size containers carried on mega seaborne vessels run by a relatively small number of shipping lines.

The crisis began in late 2020 due to a sharp mismatch in import and export volumes, leading to a shortage of containers available for exports, at ports across India. The situation worsened as economies in the region and beyond began opening up at the same time having ended national and regional lockdowns.

As industries opened up, orders for goods poured in and exports began piling up broadly around the same time in all countries, leading to congestion at major ports.

Non-availability of space in vessels calling on Indian ports and delayed availability of certain destinations, particularly in East Africa, were the other issues affecting trade. As a result, both the demand, and prices for containers had skyrocketed.
Subhayan Chakraborty
first published: Apr 30, 2021 01:44 pm

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