An inter-ministerial task force comprising representatives from the Commerce, Railways and Shipping ministries is looking to initiate several short-term actions to make more containers available to exporters and cushion prices that have gone up by 200 percent-300 percent over the last one year.
An acute shortage of shipping containers has been pushing up global prices of containers with no immediate signs of abating. Indian exporters, chasing an ambitious $400 billion export target are struggling to secure containers without hurting their bottom lines.
The Central Bureau of Indirect Taxes (CBIC) has instructed Customs to immediately release nearly 20,000 TEUs or twenty-foot containers which are currently held up due to unclaimed or seized and confiscated goods. The CBIC, citing the ongoing shortage, has said that these containers should be made available for exports. Sources that CNBC-TV18 spoke to said Customs will file weekly reports detailing the number of containers it has been able to free up, and some of this easing up is already visible on the ground.
While the government has said that container prices are determined by the market and therefore placing a price cap on them was not possible, sources indicate that the task force is mulling several short-term support schemes, such as extending TMA or Transport and Market Access benefits exports to more export categories. The government has recently expanded the scope of the TMA concessions for agriculture to include dairy products and also increased the rates by 50 percent for exports by sea.
The government has also urged shipping lines to “work as partners” with the government, Sunil Vaswani, Executive Director, Container Shipping Lines Association of India told CNBC-TV18. While pointing out that the world’s third-largest shipping line CMA-CGM has decided to freeze freight rates till February 2021, shipping lines have also requested exporters to give advance notice of their requirements to aid transparent pricing.