There is no acute shortage of containers with shipping companies “repositioning empty containers in various countries as per the market requirement,” Union Minister for Ports, Shipping and Waterways, Sarbananda Sonowal said. 

According to the Minister, due to the Red Sea crisis that began during the end of 2023 - and early 2024, “ships were forced to get diverted over the Cape of Good Hope instead of sailing through the Suez Canal”. 

This increased the transit time by 35 to 40 percent, resulting in an increase in the turnaround time of vessels, in congestion and delays of vessels at major global ports and increase in the charter hire cost by the shipping lines.

“Shipping companies are repositioning empty containers in various countries as per the market requirement,” he said in the Rajya Sabha. 

The Union Ministry of Commerce & Industry under its Service Improvement Group framework has also undertaken regular interaction with Shipping lines, port /terminal and export - import associations. 

In the meeting on January 5 with the stake holders to review the impact of Red Sea Crisis on India’s Exim trade, it advised safety convoys for the vessels through the disrupted route. 

Further, in the Service Improvement Group meeting held in June 2024, congestion of Shipping vessels across global supply chain was discussed and Container Corporation of India was told to address the Inland Container Depot congestion at hinterland. 

It was also pointed out there that shipping lines should not divert containers from India to other major ports. 

“Directorate General of Shipping also held a meeting in July with the stake holders on these issues and it was suggested promoting Indian entities owning and operating containers (was) a long-term solution,” Sonowal said. 

Container Index Down 

The Drewry’s composite container index (world) decreased 2 per cent for the week (week on week) ending July 25 to $5,806 per 40ft container following a period of continuous increases. On a year-to-date basis it has increased 268 per cent.  

The latest Drewry WCI composite index of $5,806 per 40ft container is 44 per cent below the previous pandemic peak of $10,377 in September 2021, but it is 309 per cent more than average 2019 (pre-pandemic) rates of $1,420, the report by the firm said. 

Freight rates from New York to Rotterdam increased 4 per cent or $26 to $736 per FEU (forty feet equivalent unit). 

Likewise, rates from Rotterdam to New York and Los Angeles to Shanghai rose 1 per cent to $1,954 and $706 per 40ft box respectively. 

Conversely, rates from Shanghai to Los Angeles decreased 5 per cent or $354 to $6,934 per 40ft box. Rates from Shanghai to New York dropped 4 per cent or $399 to $9,213 per 40ft container. 

“Spot rates have peaked, but continued shipping disruptions will keep a floor under the rates for some time,” sources said. 

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