The shortage of shipping containers is likely to be a “persistent problem” and has led to India spending $14.8 billion on importing transportation services, which was 65% more than the previous year, according to the Economic Survey.
It noted that the COVID-19 pandemic-related restrictions led to a smaller flow of containers in active shipping which, along with a slump in manufacturing of containers, distorted their demand and supply. “This had led to very high shipping rates. During April-September 2021, India spent US$ 14.8 billion on transportation services imports, which is 64.9 per cent higher than last year.”
The lack of containers led to a rise in sea freight rates in the range of 300% to 350%, the Economic Survey stated, citing a report of the Federation of Indian Export Organisation under the Ministry of Commerce and Industry. Combined with other factors such as a fall in the production of new containers since 2019 and a rise in the disposal of containers in the same period had led to the overall growth in the containers falling from 11% in 2019 to 5% in 2021.
Several measures were adopted to overcome challenges due to the container shortage, which included an increase in the import of empty containers, improving turnaround times of containers through tracking of dwell times and releasing of abandoned or seized containers and increasing duty free stay of containers.