The ongoing blockade in Bangladesh has begun to affect the shipping industry, especially the port yard. Importers can hardly receive containers, causing serious port congestion.
As of July 26, a total of 43,574TEU cargo has been accumulated in the Chittagong terminal yard, while the total capacity of the port is 49,018TEU. On July 25, only 191 TEU of cargo was delivered from the terminal, while the usual delivery volume was 4,000 TEU. The minimum delivery is on July 21, and the importer only receives 128TEU of goods.
The importer stated that due to the lockdown, the factories and warehouses are now closed and all employees are on vacation, so no one picks up the containers from the port terminal.
Under this circumstance, the Bangladesh Customs approved the transfer of all imported containers to 19 privately owned inland container yards (ICD) on July 25 to reduce the number of containers in the port yard.
Under normal circumstances, 38 types of imported containers loaded with goods will be transferred to ICD and delivered by ICD. However, due to the new approval, all types of imported containers will be transferred to ICD before August 31.
Omar Faruk, director of the Chittagong Port Authority, believes that importers' refusal to respond to the port authority's call for the removal of containers has caused this crisis. He said that starting from July 26, all types of imported containers will be transferred to ICD.
The total capacity of the 19 ICDs is 78700 TEU, and on Sunday, 53845 TEU of goods have been stored in the yard. Therefore, more than 15,000 containers can be stored, while the remaining area requires moving boxes.
At the same time, the Port Authority also threatened to punish importers who did not come to receive the goods within 4 days after unloading at the port terminal.
It is understood that in Chittagong, in the first four days after the joint unloading, the importer does not need to pay the rent for the storage container, and the rent will be collected from the fifth day. According to the work regulations of Chittagong Port, when the number of containers in the yard increases, the authorities can impose punitive rents on the containers that have been detained over time.
No boxes are available, Indian exporters cannot receive new orders
Because Indian exporters have no containers available, foreign buyers have begun to cancel shipments from India, causing the goods to be stacked in different ports for several weeks.
Coupled with soaring freight rates and port congestion, freight rates are already higher than product costs, and Indian small exporters struggle for every penny.
HKL Magu, general manager of New Delhi-based apparel manufacturer Jyoti Apparel, said in an interview: "High freight rates can be absorbed, but the absence of containers directly changes the rules of the game. Several ships are bypassing India because there are no containers. Ship goods. Sometimes our goods stay at the port for three to four weeks. International buyers tell us to either cancel the order or ship by air. But air freight is also soaring."
Before the epidemic, the air freight for each shipment of general cargo fluctuated between US$1.07 and US$1.34, and now it is between US$4.38 and US$6.04.
"For us, clothing is a perishable product, because fashion and trends change quickly. If a certain color of clothing is on the shelves in August, but the goods do not arrive at the destination on time, then the value of the clothing will be outdated. And halved. Until we have our own containers, the shortage of containers will continue."
In the last fiscal year, India’s exports of garments fell by 20.75%, while exports of textiles and clothing fell by 13%.
Although exporters are negotiating with shipping companies and the Ministry of Transport of India, the Federation of Indian Exporters Organizations (FIEO) will soon launch an online portal to facilitate exporters’ business operations.
FIEO Chairman A Sakthivel said: “FIEO will launch an electronic module in mid-August 2021 to provide a platform where shippers can put forward container requirements and freight companies can publish their competitive quotations. This market will ensure transparency and competitiveness. Price and effective planning."
Although the shortage of containers is not unique to India, export agencies have asked shipping companies to put in more empty containers and Indian Railways to provide free transportation of containers from gateway ports to inland areas. The current waiting time for containers ranges from 10 days to 15 days, while at the beginning of 2020, the waiting time is only one day. The exporter will pay 100% of the insurance premium for the urgently provided container.
