All the countries across the globe have been dealing with the economic hit caused by the coronavirus pandemic, in their own ways. For India, it has meant struggling with overbooked vessels and shortage of containers - almost a daily challenge which forwarders and shippers have been experiencing from 4th quarter of the year 2020 and have seen no respite until now. Hence, the situation has triggered freight rate hike to abnormal levels affecting the overall costing.
Moreover, amidst the global tension as well as the “ATMANIRBHAR BHARAT ” initiative from our Prime Minister Mr. Narendra Modi which basically means being self-reliant (self-sufficient); we have seen a marked reduction in imports, especially from China.
Reduced imports in turn, have led to the shortage of containers at sea ports and inland terminals. This has only resulted in delayed exports, deferred commitments and ultimate loss to the end customer coupled with price hikes in sea freight rates owing to demand-supply imbalance. The high demand and overbooked vessels with a few blank sailings thrown-in, have led to a backlog at the load ports specially at Mundra, Chennai & Tuticorin where vessels (or ever feeders – smaller vessels) are passing by their designated ports without docking due to reduced/no space on the vessels.
What Next?
To ease the pressure, some carriers have commenced carriage of empty containers from China and nearby transshipment ports like Colombo into Indian ports to feed the rising demand and to ensure that the exports to the global markets can be handled more smoothly. This exercise however comes at an additional cost to the shippers by way of “container repositioning” for equipment sourced at the inland container terminals.