Indian exporters suffer twists and turns of freight amid Lanka, Singapore transhipment jam

New Delhi: Congestion at the transhipment ports of Singapore and Colombo is causing a spillover effect in India, with exporters citing a lack of enough feeder vessels. There is a surge in China-US trade as well, causing more containers to be deployed between the two trading superpowers and reducing availability for others, sector watchers said.

This is also driving up freight rates globally. The rate for a 40- foot container between Shanghai and Los Angeles zoomed 133% year-on-year to $5,894 last week, according to maritime research consultancy Drewry. From Shanghai to New York, tariff increased 106% to $7,893.

“Chinese players are frontloading their American exports ahead of the Christmas rush,” a sector watcher told ET. This is leading to a global container supply crunch, he said.


Also read: Indian manufacturers turn to air freight as West Asia crisis disrupts sea shipments

China’s exports to the US grew around 17% in July from a year earlier, while imports rose 15%.

Domestic traders said a container imbalance fee is also being levied, and liners are “charging whatever they like.”

Sunil Vaswani, executive director at the Container Shipping Lines Association, however, denied container shortages. “There is some congestion at transhipment ports like Singapore and Colombo, which could be causing some delays,” he added.

There is heavy congestion at Colombo and Singapore, and containers are getting held up, said a Chennai-based packaging producer. Feeder vessels are not available from Port Klang in Malaysia to Chennai, due to which routing happens through Singapore, he said.

The packaging producer said containers have to wait for 15- 20 days in Singapore, which is much longer than the three to four days it typically takes to reach Chennai from Port Klang.

Also read: Investor interest in Indian shipyards hinges on faster execution



“Global shipping lines are not taking bookings, citing a container shortage,” another trader said, adding that booking schedules are available only after a month. “They are taking spot bookings but not guaranteeing that the container is loaded onto the particular vessel.”

“There are similar issues in Cochin and Tuticorin as well. The freight rates are changing on a daily basis, and the transit time has increased,” said a Kerala-based exporter of food products.

Jebel Ali, the largest man-made harbour and the busiest container port in West Asia, has been offline since the Iran War escalated. “While initially the constraints were limited to West Asian cargo, a wider redrawing of supply chains is taking place with the war continuing,” a shipping industry representative said.