Equipment scarcity has been a heavy blow for Indian shippers scrambling to keep pace with a stronger-than-expected export turnaround following the lifting of COVID-19-related lockdowns. But there seems to be no shortage of finger-pointing over fixing the supply-demand mismatch that is likely to linger at least into the first months of the year, if not beyond.
While mainliners active in India trades continue to tout their high investment in empty repositioning to rebalance inventory flow, cargo interests argue those efforts have been suboptimal and at a rate vastly incommensurate with the demand growth.
“Overall, we do not see any significant improvements on the ground,” an official at the Federation of Indian Export Organizations (FIEO), who requested anonymity told. “It’s true that there is now some respite around the availability of standard 20-foot dry units, but that has much to do with a gradual recovery of import trade.” India’s merchandise imports in December rose for the first time in 10 months — up 7.6 percent year over year, according to government data.
The Container Shipping Lines’ Association (CSLA) — the representative voice of foreign carriers in India — said in a statement, the present imbalanced situation is a product of demand suddenly and unexpectedly outstripping available capacity, which is a global phenomenon rather than being limited to India.
The group noted that despite the widespread challenges wrought by pandemic-linked shutdowns, carriers had been exceptionally proactive in trying to mitigate equipment shortages across continents. “The [shipping] lines, on their part, deployed all their vessels and bought/leased additional containers,” CSLA said. “This additional volume increased to 1.5 million TEU [globally] during the second half of 2020. No more containers or vessels were left to be put into service.”
CSLA expects inventory flow to brighten soon and believes carriers blanking fewer sailings around Chinese New Year will help reach that goal even as congestion problems at transshipment hubs along with tardy cargo clearance pose persistent challenges.
“The shipping lines continue to reposition empty containers into the country for exports,” it said. The recent intra-Asia call additions out of Jawaharlal Nehru Port Trust (JNPT) and Chennai should also augur well for greater import flow, according to industry observers.
Data shows; for empty movement out of two key port locations — Jawaharlal Nehru Port Trust (JNPT) and Chennai — paints a mixed picture. At JNPT, April-December inbound empty volume totaled 190,823 containers, or 310,805 TEU, up from 118,156 containers, or 202,353 TEU, a year earlier, which by month translates into some 21,000 containers, or close to 35,000 TEU. The port’s outbound empty handling during the same period nearly halved to 178,145 containers (250,031 TEU) from 336,571 containers (465,795 TEU).
Combined empty imports during 2020 out of terminals in the Chennai region, including Kattupalli and Ennore, slid 26 percent year over year to 67,491 TEU, according to data. Empty-handling figures for notable private handler Mundra were not immediately available.Some carriers implement empty repositioning fee Not with standing the JNPT empty gains, that dissection brings in stark view the scale of repositioning advocated by liners, which they earlier put at some 100,000 TEU per week nationwide.
Freight forwarders voiced similar concerns. A Cochin-based broker said all carriers — with the exception of Mediterranean Shipping Co. and CMA CGM to some extent — are increasingly prioritizing contract clients, badly hitting spot bookings.
Reflecting the imbalances, some liners have now begun levying an empty repositioning fee of $300 per container on Kolkata shipments for sailings out of JNPT.
Although current market trends present an opportunity for carriers to maximize loadings, they appear leery of investing in any asset building, given the unpredictability of global trade caught up in a second wave of the pandemic.