Increasing Freight Costs and Container Shortages Threaten Exports: GTRI
By: Admin
September 16, 2024
Categories: Export Import | News
4 Min Read
The Global Trade Research Initiative (GTRI) has warned that rising freight costs, container shortages, and reliance on foreign carriers pose serious threats to India’s export sector. The think tank emphasized these concerns on Sunday, urging immediate action to minimize risks linked to global supply chain disruptions.
Key Challenges:
- Rising Freight Costs: Since 2019, the cost of shipping a 40-foot container has surged from $1,420 to an average of $4,775 in 2024. This sharp increase reflects ongoing supply chain disruptions after COVID-19.
- Container Shortages: India is facing a severe container shortage, mainly due to its reliance on foreign carriers and hubs. Producing less than 1% of the world’s containers leaves the country vulnerable to bottlenecks.
- Dependence on Foreign Shipping Lines: Around 90-95% of India’s cargo is transported by foreign liners. This heavy dependence limits India’s control over freight rates and transport availability.
GTRI Recommendations:
To tackle these challenges, GTRI suggests several strategies:
- Boost Domestic Container Production: India must increase container manufacturing. While key hubs are emerging in Bhavnagar (Gujarat) and Chennai (Tamil Nadu), production is still insufficient.
- Promote Indian Shipping Companies: Strengthening local shipping firms is crucial to reducing reliance on foreign carriers.
- Invest in Domestic Shipping: GTRI urges India to expand its domestic shipping sector, which could help reduce costs and lower risks associated with global hubs like Singapore and Colombo.
Global and Geopolitical Risks:
GTRI also raised concerns about unverified reports of China stockpiling containers. Additionally, the escalating US-China trade war could further disrupt the global supply chain. India’s dependence on Chinese containers and foreign liners puts it at risk of rising costs and potential delays.
With trade tensions increasing and logistical challenges growing, GTRI emphasized the need for India to invest in infrastructure to safeguard its export industry from future disruptions.
#ExportIndia #FreightCosts #ContainerShortages #GlobalTrade
