Shipping lines have repositioned 1.84 million TEUs so far: Sarbananda Sonowal

Rishi Ranjan Kala | Updated on: Feb 08, 2022
 Union Minister for Ports, Shipping & Waterways Sarbananda Sonowal

Union Minister for Ports, Shipping & Waterways Sarbananda Sonowal | Photo Credit: -

Govt forms inter-disciplinary task force to deal with crisis in freight shipping

In order to deal with the crisis in freight shipping on account of the global container shortage, the government has formed an inter-disciplinary task force, which is taking coordinated action on identified tracks including pressing additional shipping and container capacity into service and enhanced import of empty containers by shipping lines, the Minister of Ports, Shipping and Waterways Sarbananda Sonowal said on Tuesday.

“Regular interaction with the shipping lines and their association has resulted in increasing the availability of the number of empty imported containers. So far 1.84 million TEUs (twenty-foot equivalent unit) have been repositioned by shipping lines,” Sonowal said in a written response to a query in Rajya Sabha.

Besides, new services to West Africa, the US, Europe and Far East has been started by shipping lines further increasing containers supply and availability of space on ships. The SCI has also diverted one 4,500 TEUs container ship ‘SCI Chennai’ engaged in coastal trade to EXIM trade from October 3, 2021, he added.

The task force

The inter disciplinary task force consists of officials from the Commerce Ministry, Ministry of Ports Shipping and Waterways, Railways, the Central Board of Indirect Taxes and Customs (CBIC) as well as stakeholders like the Federation of Indian Export Organizations (FIEO).

“The task force after considerable stakeholder consultation, is taking coordinated action on identified tracks including pressing additional shipping/container capacity into service including enhanced import of empty containers by shipping lines to the country, improved operational planning by facilitating close coordination between exporters and shipping lines, release of abandoned/ detained/ seized containers,” the minister informed the upper house of Parliament.

Other efforts include increasing duty free stay of containers, freight discounts for empty repositioning by Railways, measures to improve the turnaround times of containers through tracking and monitoring of dwell times so as to effectively enhance availability of containers, seeking out possible ways to promote use of bulk/ break-bulk movement by exporters as compared to containerised movement wherever feasible, Sonowal said.

That apart, the Directorate General of Shipping (DGS) had issued an advisory on September 14, 2021, to the shipping lines freight forwarders, non-vessel operating common carriers, multimodal transport operator, customs house agent operating in India advising not to levy any special priority charges for according any priority to the containers.

Covid impact

The pandemic forced governments across the world to impose restrictions with respect to ship calls, quarantine period and crew change thereby impacting the movement of goods. This coupled with a significant growth in demand led to congestion at ports, thereby leading to not just a shortage of containers, but also higher transport costs.

The average market rates levels for shipping goods from India to North Europe base ports rose from $500-950 (pan-India) in January 2020 to $4,700-6,800 in January 2020. Similarly, The average market rates from India to the US rose from $1,650-2,300 in January 2020 to $8,400-11,300. The rates are for both 20 feet and 40 feet containers.

Similarly, cargo volumes also were impacted. As per government data, the cargo volumes at major ports fell to 672.68 million tonnes (mt) in FY21 from 704.93 mt in FY20. Volumes at non-major ports also shrunk to 577.12 mt in FY21 from 604.84 mt in FY20. The total cargo traffic fell to 1249.80 mt last fiscal from 1309.77 mt in FY20.

Published on February 08, 2022
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