(MENAFN- KNN India)
New Delhi, Nov 4 (KNN) The Indian government is stepping up efforts to alleviate a critical container shortage affecting exporters, a situation exacerbated by a surge in shipments from China aimed at circumventing U.S. tariffs.
The shipping Ministry, in collaboration with the Railways and other line ministries, is implementing several policy measures to enhance container availability.
Internal discussions among these ministries revealed that Chinese exporters have been“front loading” shipments to the U.S. to avoid impending tariffs, worsening the global container shortage. A Shipping Ministry official explained that this rush has led to increased demand for containers, further straining availability.
Front loading refers to the practice of accelerating costs or benefits to the initial phases of a process, and with new tariffs on Chinese goods ranging from 25 per cent to 100 per cent, Chinese exporters are hoarding containers in anticipation of future increases.
In response to this crisis, the Shipping Corporation of India (SCI) plans to charter five additional container ships to boost shipping capacity significantly.
Additionally, the Jawaharlal Nehru Port Authority (JNPA) is developing a centralised system for managing empty containers at major ports, which aims to improve the utilisation and distribution of these critical resources.
The Railway Board has also taken action by significantly reducing storage and handling charges for containers that have been at ports for over 90 days, cutting costs by 70-80 per cent. This reduction is expected to lower freight expenses and improve container availability for exporters.
The issue gained prominence around July and August when a significant shortage was observed ahead of the first wave of U.S. tariff increases.
Shipping rates from China have risen in response, with recent data from Drewry showing a 4 per cent increase in the world container index, reaching USD 3,213 per forty-foot equivalent unit (FEU).
Freight costs have more than doubled over the past year for Indian exporters, influenced by geopolitical tensions and ongoing logistical inefficiencies, including port congestion.
To support the container shipping sector, the Shipping Ministry is drafting regulations for Vessel Sharing Agreements (VSAs), potentially exempting the industry from antitrust laws for three years, provided that a portion of the space is allocated to Indian flagged vessels and non-vessel operating common carriers.
With the ongoing complexities of global trade dynamics, these government interventions are critical in ensuring that Indian exporters have the necessary container capacity to meet international demand.
(KNN Bureau)
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