Severe shortage of sea containers leaves global food supply chain ‘high and dry’
The severe shortage of sea containers – both dry and reefer – has affected the global food supply chain, leaving tonnes of perishables such as onions, meat products and millets lying uncleared in India due to the delay in shipment.
Imbalance in containers
As a result, people in Thailand are unable to get maize and chilly on time from Chennai, Malaysians and Indonesians are facing shortage of rose onions, and the Japanese are waiting for shrimps from the city. These are just a few examples of how the imbalance in containers is having an impact on the food chain. The imbalance started mid-last year with a number of export containers from China stuck at various ports in the US. Further, there was huge congestion at all major global ports, and slots for container storage were unavailable. This forced ships to be at the anchorage for many days, leading to delays in delivery of cargo.
“It used to take 18 days to ship rose onions to Thailand from Chennai. However, due to container shortage, it is now taking over 45 days,” said P Mathan of Agrogreen Resources India, an exporter of agro products such as onions and chilly. At the company’s godown in Red Hills in Chennai’s outskirts, tonnes of onions are ready for shipment, but are awaiting containers, he added. The imbalance in container has hurt exporters badly as they had to pay for freight to South East Asian (SEA) countries, says Agri Commodities Exporters Association’s President M Madan Prakash.
Till December, the freight was ‘zero’ from Chennai to SEA destinations as boxes were available in plenty in Chennai due to higher imports. Shipping lines quickly evacuated the boxes at ‘zero’ freight to SEA so that the containers are made available in China where, due to container shortage, companies were willing to pay a huge premium for shipping export cargo, especially to the US, he added.
However, lesser import and diversion of boxes to China led to a severe shortage of containers in India and, since January, freight to SEA is nearly $200 per TEU, said Prakash. The huge congestion at the transhipment ports led to further delay in cargo reaching the final destination, he added.
Seafood exporter Elias Sait said there is a huge delay in shipment of shrimps for Japan due to shortage of reefer containers. Even if containers are available, there is a shortage of reefer points at transhipment ports, he added.
Agility Emerging Markets Logistics Index Survey 2021 said that the traditional sea freight peak season usually occurs in October. Shortage of containers in China were particularly acute at the start of 2021. The demand for Chinese exports was very high over the second half of 2020.
Even though China’s import demand is growing, there are few containers returning to China to be refilled and sent out again.
The repercussions are being felt across Asia, with container shortages in Japan, South Korea, India and South-East Asia expected to last at least until mid-2021, with shipping rates over the period reflecting the supply-demand imbalance, the survey said.
Shipping line AP Moller-Maersk, in its 2020 annual reports, said that uncertainties related to the strength of container demand, continue to pose a risk to the developments of freight rates in 2021.
Source: The Hindu Business Line