Amid the crisis faced by exporters because of a shortage of containers and a spike in ocean freight rates, Praveen Joseph, CEO, DP World Cochin, spoke to TNIE on the issues in the sector.
Q. What's the reason for the shortage of empty containers? What is DP World Cochin doing to address the situation?
As per our understanding, a drop in import volumes, buoyant export volumes and the delays caused by the congestion in Colombo port seem to have combined to create a shortage of empty containers. This is the situation across India as well as in many parts of the world, and is not specific to DP World Cochin.
Providing sufficient empty containers for the contracted business is part of the agreement between a shipper and the shipping line. DP World and Cochin Port have no direct influence on the availability of empties, but have taken measures such as accommodating additional mainline calls, additional space for
empties, competitive charges, etc., to help ease the situation.
Q. What's the issue at Colombo port? Is it true that import consignments not coming to the Kochi port is causing the empty container shortage? Has the Colombo port been closed for the past several days as some workers have contracted Covid-19?
We understand that because of the lockdown in various parts of Sri Lanka amid the pandemic, there has been a shortage of staff at the Colombo port, which has led to low productivity at their container terminals. This has resulted in significant backlogs and delays impacting the schedule integrity of the ships calling at Colombo.
Q. Can you give a comparable number of containers coming to Kochi and the fall in numbers now?
In the last three months, the average drop in volume of imports at Kochi is 7 per cent compared to the same period last year. Shipping lines have been bringing in empty containers to allocate for exports and if we consider our total inbound volumes (import plus empty containers brought to Kochi), the situation in the last three months is better (12 per cent higher) compared to the same period last year.
Q. What's the average monthly shipment from Kochi now, and three months back?
We have been averaging above 60,000 TEUs per month for the last three months (Sep to Nov 2020), and we had our highest monthly throughput of 66,078 TEUs in November. We expect to handle similar volumes in December as well.
Q. Freight rates have also gone up in recent months. Can you explain why?
Freight rates charged by shipping lines have gone up not only from Kochi but reportedly across the world. They are usually driven by the demand-supply scenario.
Q. Earlier, seafood exporters said their exports have also been affected due to some issues at Kochi and Colombo port. Have you been able to address the issue?
There are no issues in terminal operations at DP World Cochin. On the contrary, volumes handled at the port have increased significantly. Due to the productivity issues and delays at Colombo, vessels operated by the shipping lines have been arriving late and this has impacted certain parts of the export trade. The trade has reported a shortage of refrigerated containers for seafood exports. The matter has been taken up with the shipping lines to request their support to supply refrigerated containers to the seafood exporters.