Indian government leaders have promised exporters some notable proactive steps to ease their supply chain pain points, but industry stakeholders remain sceptical about their winnability and value proposition amid multiple challenges.
At a high-level stakeholder meeting held on 19 September to address exporter concerns, officials agreed to extend relief in the form of longer free times for empty containers, lower rail yard fees, faster cargo movements and investment in containership fleet.
Container Corporation of India (Concor), port authorities and Shipping Corporation of India (SCI) have been asked to lead those efforts. Representatives of foreign container lines also pledged to support government efforts.
“The decisions taken by the Ministry of Ports, Shipping and Waterways and Ministry of Railways in the meeting will result in significantly breaking down shipping costs, improving availability of containers, resolving empty containers issue, faster evacuation of export consignments and reducing congestion at the ports,” said union minister of commerce and industry Piyush Goyal said.
Explaining the steps to be implemented, Goyal noted that Concor would allow storage of empty containers at its yard in Nhava Sheva Port (JNPA) free of cost for 90 days, in addition to offering a steep reduction in related container-handling tariffs for boxes staying this period.
Similarly, SCI will provide more capacity to serve Indian export/import trade, while other foreign carriers promised some concessions or downward adjustments in their container transportation rates and lift-on/lift-off charges applied at storage yards.
JNPA chairman Unmesh Sharad Wagh noted various measures being taken to alleviate congestion problems at the port, which he believes would result in quicker clearance of cargo and shorter turnaround times.
Stakeholders also stressed the need to speed up air cargo flows.
Goyal called on all stakeholders to make “concerted efforts to significantly mitigate the difficulties and address the issues faced by the exporters, effectively deploy multi-disciplinary capabilities and adopt ‘whole of the government’ approach to ensure that no logistic difficulty is faced by the exporters.”
The minister went on to explain: “Due to the current geopolitical tensions, the Red Sea crisis, Houthi operations, ongoing wars and its impact on international trade, there was a need to engage with a multidisciplinary team.”
“The government will continue to regularly monitor the situation,” Goyal added.
However, while welcoming the government intervention, industry experts believe as the market remains exposed to disruptive events, supply chain volatility is an industry-wide problem.
According to them, empty container flow has been impacted by longer or unsettled vessel sailing schedules, while ports have had to deal with space pressures due to stronger-than-expected volume surges.
Meanwhile, ocean rates on major export trades out of India have noticeably dropped over the last month or so, but they continue to remain above pre-pandemic market levels.
Jenny Daniel
Global Correspondent
Contact email: [email protected]
