TN exporters hit by shortage of containers, hike in freight charges

Nowadays, containers are not returning from the United States and Europe but going directly to China, creating a further shortage.

Published: 22nd September 2021 09:54 AM  |   Last Updated: 22nd September 2021 09:54 AM   |  A+A-

Image used for representational purpose only.

Express News Service

NAMAKKAL: Beset by problems including shortage of containers, exorbitant shipping charges, exporters have called upon the Union government to bale them out.

Tamil Nadu Banana Growers Federation state general secretary G Ajeethan said though the country has been producing food grains, vegetables and fruits in surplus, exporting them has become difficult. "Inland freight charges increased by 200 per cent due to a rise in fuel price and ocean freight charges by almost 300 per cent compared to last year. For instance, for Felixstowe Port (in the UK), the ocean freight charge was $1,000 in February 2021. But now it has surged to $7,000. Similarly, for New York, the charge increased from $2,000 in February to $12,000."

Ajeethan urged the government to intervene and offer support to exporters. "The government should help us export at the cost international trading community deals in. Otherwise, we will not be in a position to earn profits. Also, importers will no more be interested in sourcing from India which would sound the death knell for us," he added.

With the Union government firm on reducing dependence on China, the availability of reefer containers has become a huge challenge, he said. None of the Indian companies figures in the top ten shipping companies in the world. The Chinese government's shipping company owns 59 terminals across the world, of which 51 are container terminals handling 126.8 million twenty-foot Equivalent Units (TEU) (shipping containers). The country is the world's largest container operator. Nowadays, containers are not returning from the United States and Europe but going directly to China, creating a further shortage, Ajeethan said. He said the Container Corporation of India should produce more containers to compete with international players.

On the other hand, All India Poultry Products Exporters Association secretary Valsan Paramaeswaran said table egg exports, which started 25 years ago in a small way to Kuwait, was expanding steadily across the world with a 20 per cent annual growth rate till 2018. "But, due to bird flu and the country remaining a single production zone, most of the countries, particularly the UAE, have banned Indian eggs. We have submitted petitions with the Union government to take steps for reopening the UAE market. If the UAE market is opened, egg export will grow by at least 30 per cent. Though the instances of bird flu are high in northern parts of the country, they have affected farmers in Namakkal. Our exports are limited to Qatar, Bahrain and Oman. Over 15 companies used to export eggs, but the number has fallen below 10 now," he said.

Further, Paramaeswaran pointed out that subsidies given to poultry exporters had been cut. "In the past, we used to get 33 per cent subsidy from Agriculture Product Export Development Authorities (APEDA), 2.5 per cent from Directorate General of Foreign Trade and 5 per cent from Special Agriculture and Village Industry Scheme. But, all these subsidies have been cut. We urge the Union government to offer all subsidies to egg exporters and create separate egg export zones," he demanded.

For power loom companies, the GST regime seems to have dealt a blow. Tamil Nadu Power Looms Federation state president Dr MS Mathivanan said hundreds of power loom companies had wound up over the last three years. "By virtue of producing latest collections, fabric items are exported to Europe, US, Bangladesh, etc. Though we have been suffering due to shortage of containers and freight charges, the spoilsport for our business is the five per cent Goods and Service Tax (GST). The procedures and formalities involved in filing GST returns are very complicated," he said.

Stating that even big companies were struggling because of GST, Mathivanan urged the Union government to focus on the GST-related issues and provide financial support for small companies and entrepreneurs.

All Sea Ports Trailer Owners Consortium president P Gopinath said though imports were going on normally in Chennai and Tiruvallur ports, exports were dull due to lack of containers.

"In the past, over 1,500 containers were utilized for export regularly from Chennai and Tiruvallur ports. The number has dropped to 300 now. In this critical condition, It's been a struggle for us to get container loads. The Shipping Corporation of India must focus on the issue and bring the crisis under control," he said.


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