Rising air freight, shortage of containers for sea freight and lockdown for six weeks due to Covid second wave has meant nearly Rs 2,500 crore worth garments stuck in Tirupur. Worse, these may never make it to the overseas markets, instead could end up at fourth the the price for Diwali in India.
Tirupur was shut down either partially or wholly for nearly 6 weeks in April-May, the peak production months. The consequential impact was such that there was no production and orders could not be completed. When the lockdown was relaxed, the pending orders were completed, and just around that time, the containers were not available for exports and air freight rose sharply.
“We are unable to send the goods by flights. There is a huge backlog at various airports. Freight rates too have risen to Rs 300 a kilo from pre-Covid rates of Rs 100 a kilo. We are willing to pay, but there is a queue and the pile up at the airports is only increasing,” said Raja M Shanmugam, President of Tirupur Exporters Association (TEA). Ocean freight situation is worse. Shipments to Europe now cost $5,000 a container from $1,500 pre Covid and to the US it has risen to $14,000 now from $3,000 pre Covid,” he said. “Nearly Rs 2,500 crore worth garments are lying at various points and exporters are negotiating with brands to ensure they don’t lose. The sad part is some of these are seasonal items and if they miss that window for sale in the overseas markets, they get outdated. Either the brand has to offload it on “sale” at nearly a fourth the price or we have to cut the brand label and sell it in India which is not economically beneficial,” he said.
TEA has taken up the matter with the state and central governments to help ease the congestion at the airports. “We have approached the government, we are waiting for some response,” he added.
