Indian exporters are facing heavy losses and compelled to cancel the orders due to unavailability of container space and massive rise in Sea freight

Home Textile Exporters’ Welfare Association (HEWA) is continuously working for the benefit and safeguarding the interests of Small and Medium Exporters in the Textile sector. Its delegates Anant Srivastava, Nishant Parmar, Vikas Singh Chauhan and Pratap Chauhan met Joint Secretary Logistics, Shri (Dr) Surendra Kumar Ahirwar, Ministry of Commerce and Industry, Udyog Bhawan New Delhi on 12.08.2021 and apprised him about sudden rise (upto 5 times) in freight charges by shipping lines and unavailability of container space.

 HEWA delegates discussed and brought to the knowledge of Shri Ahirwar various issues of Exporters.  Following are the points of discussion.

Frequent and uncontrolled freight increase by Shipping Lines:

1. Upto fivefold rise of Sea freight in last 2 months:

During booking of trade lead, Exporter/Buyer calculates freight cost in their costing as “X” amount. But after completion of the production cycle of 45-60 days and at the time of execution of shipment or booking of container, freight rates level increases up to 4-5 times higher as calculated “X” cost (Pre- costing) which is very difficult to accept by Buyer/ Exporter.

For e.g.: As per XX shipping line notification am going to show you the data from July 2021 to Sep 2021 how they increase the rate in terms of GRI/PSS/RRI from July to Sep 8500 USD on 20ft containers and approx. 9000 USD on 40ft containers.

2. Overcharging on Exchange rates on freight amount:

In Exchange Rate Conversion now companies are charging on higher side up to INR 4.00 (as per the customs rates) due to which the exporter has to face two exchange rates in the same shipment one for the customs and other for the shipping line. Doing payment directly to shipping lines by small and medium exporters is not feasible or possible from the Exporter side as it includes various bank charges if the amount is small and the bank sends outward on card rates.

3. THC: There is No uniformity for THC for all carriers as every GRI / PSS/ RRI. Now days after COVID-19 the Exporters are accepting the fact that carrier space situation is tough but at the same time they also need for evolving some control mechanism for Carrier so that uniformity could be to maintained for THC for all carriers so that exporters can ship their consignments in a hassle free manner.
4. IHC: For Inland haulage, the carriers are charging IHC as a linear account instead of shipper PDA account. As compared to private ICD operators, they are charging above 30% and some of the carriers (Small) are charging above 50%. As there is no check and control mechanism for which the exporters are facing the problem.

Suggestions:

1. a) Promotion of Domestic Transportation to manage empty container inventory:

Submission of MMT model as the Govt. is promoting Sagar Mala operations and this is appreciable work but the Sea/River facility is not available everywhere. We should promote domestic trains through closed containers from North to South, East and the West. Which will benefit all industries and across the country to manage empty container inventory.

1. b) Digitalization: As India is progressing and digitizing most of the areas, the carriers are also promising the same but still the Exporters are unable to get the inventory dashboard. During receipt of CRO (container release order) shipper is not having a visibility of container availability nominated pick up which is authorized by the carrier only.

In the wake of circumstances quoted above, the HEWA, on behalf of small and medium exporters humbly request for extending cooperation in these testing times so that Indian Exporters can make their best possible contribution towards the cherished goal of ‘AATM NIRBHAR BHARAT MISSION’ of Hon’ble Prime Minister of India Shri Narendra jee Modi.

During our meeting Joint Secretary Shri Ahirwar noted all the points and assured the HEWA delegates for all possible support to promote the Indian exports and also requested Indian forwarding and exporting companies to come on same page to resolve the issue amicably by innovative approach.

Government is working to promote other routes like INSTC; Exporters can use this route in the coming days to ship their Goods to Russia, once the load will move to alternate route like INSTC, other routes will see the ease of congestion as INSTC  is a Multi-Modal Trade Transport network connecting India with Central Asian & Eurasia countries and envisages movement of goods from Mumbai to Bandar Abbas by sea, from Bandar Abbas to Bandar-e-Anzali (an Iranian port on the Caspian Sea) by road, from Bandar-e-Anzali to Astrakhan (a Caspian port in the Russian Federation) by ship and from Astrakhan to other regions of the Russian Federation by Russian railways. The INSTC has the capacity of 20-30 million tons of goods per year.