Global Shipping Crisis
The pandemic resulted in slowing down of clearances of containers from major container terminals in the world.
This was caused due to the acute shortage of manpower in the areas of customs clearance, food security, equipment handling, drivers etc.
This created The Worst Congestions in all leading container terminals.
In 2021, the largest terminal in China, Yantian was shut which caused huge disruption.
Mother vessels with capacity of 20,000 TEUs wait for weeks to get space to dock at terminals
None of the Indian companies figure in the top ten shipping companies in the world.
Cosco which is a Chinese government owned shipping company is the 2 nd or 3 rd largest in the world. They own 59 terminals in the world out of which 51 are container terminals and they handle 126.8 million TEUs making them the world’s largest container terminal operator.
Boxes are not returning from US and Europe as expected but going directly to China, creating further shortages.
Freight from China to Europe and US has sky rocketed and hence shipping lines are giving preference on this route, which is affecting India.
Next challenge will be with cargo starting to move for Christmas. Container ships are going to be over-booked and they have already announced blank sailings to Indian ports.
Even ships which call on Indian ports hardly take much export cargo.
The Suez Canal episode added to the woes of the shipping crisis.
Freight rates for both 20 & 40 ft FCLs have gone up multifold if we compare the current rates to that of the pre-pandemic days.
Except for high value cargo none of the other exporters can afford such high freight rates.
Trans-shipment delays and delays on account of rollover at ports have increased the transit delays by two and three times to what it was in 2019.
Exporters who have signed off long term CIF contracts are losing heavily as customers are not agreeing to revise contracts.
While India has been doing well so far in its exports, we could have done much more and we are facing a serious crisis going forward with huge sailing cancellations in August and impending surge in demand for Christmas goods.