The Hindu Business Line : Space shortage in mother vessels hits Indian shippers

SHORTAGE of space in container mother vessels (providing direct sailings among international major ports) is affecting Indian shippers, even as the imbalance between supply of cargo and demand for space is widening.

Most of the Christmas and New Year shipments have left India in the last four months to the US and the UK. However, there are still a few shipments to these countries, which are getting delayed due to shortage of space in mother vessels at various transhipment ports, including Singapore, Colombo, Hong Kong and Port Klang, said a source in a major shipping line.

One of the reasons cited for the shortage of space is the "China factor''. The Chinese shippers, and to some extent shippers from South East Asian countries and Australia, occupy most of the space in mother vessels, and leave very little space for Indian cargo. Indian shippers, especially from South, need to send their cargo to the US or Europe through transhipment ports using feeder containers vessels. "All the feeder vessels are going full, and we need to wait for a long time in transhipment ports to get space in mother ships," the source said.

The Chinese shippers also have an advantage of direct sailings to the US and European ports, while Indians need to send their cargo, say from Chennai, through transhipment ports. The Chinese not only provide goods at a cheaper cost than Indians, but also have the advantage of reaching the US and European destinations faster. The huge export volume also gives Chinese an edge over Indian shippers, the source said.

According to various media reports, China has a projected $140-billion trade surplus with the US this year. India's exports during April-October 2004-05 were valued at $40.02 billion, and out of this the US accounted for nearly 18 per cent.

Box freight rates to US rise

CONTAINER ocean freight rates to the US from India increased by $250 a TEU (twenty-foot equivalent unit) to $300 in the last six months. From Chennai, the rate currently hovers around $2,000 a TEU and $3,000 an FEU (forty-foot equivalent unit).

To the US east coast, the rate is $200 more from Chennai. Similarly, the volume to the US increased by nearly 25 per cent this year over last year to around 50,000 boxes, a source in a shipping line said.

There is a big increase in exports in the last six months, and especially in textiles. The surge could be in anticipation of the end of quota regime from next year.

"Such a surge was never seen in the past, and there is an increasing demand from global retail players, including Wal-Mart," said a source in a shipping line.