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Synopsis

“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).

AP
Among major countries, India’s exports to China (20.78%) and the US (15.54%) grew at the fastest pace in September.

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 of Indian Export 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 difficult.

“Non-availability of containers for the export 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 offering 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 Efficiency 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.

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