With new Covid lockdowns in China becoming another major challenge for global supply chains already facing widespread dysfunctions, container lines operating to and from India are expecting a knock-on negative effect on the availability of empty equipment for the resurgent market.
Indian exporters are already running substantially short on inventory capacity at busy inland container depot (ICD) locations and any further equipment pressure could only raise the risk of shipment uncertainty for them.
That concern in large part stems from the fact that Chinese imports are typically the chief source of equipment supplies for Indian export trade.
According to Sunil Vaswani, executive director of the Container Shipping Lines Association (CSLA) in India, due to high worker absenteeism as a consequence of the lockdown restrictions, Chinese terminals in and around Shenzhen – mainly Yantian, Shekou and Da Chan Bay – have had to operate at a slower pace, impacting vessel flows and landside activity.
“In case the situation does not improve over the next couple of days, completion of vessel operations and their eventual sailing could get delayed, leading to a cascading effect & eventual congestion at ports and even perhaps some blank sailings, as vessels would scramble to keep their schedules,” said Vaswani, adding, “Any delay in the turnaround of ships could not only delay the shipments but also further impact the already tight space and equipment situation.”
Container xChange, a maritime equipment marketplace provider, in its latest market report echoed that warning, although it noted that the disruptive implications have yet to come into full view.
“The lockdowns in Shenzhen, Zhejiang, Shanghai, Jilin, Suzhou, Guangzhou and Beijing [19 provinces as of Sunday (13 March), probably more to come in a few days] imposed now will clearly heavily restrict container movement at these ports, which will, as we have seen in the past, prove to be further damaging for the global supply chain,” said Container xChange.
“Clearly, 2022 has not brought any cheer to the supply chain industry. On top of this, [Russia-Ukraine] war will just prove to be another disruption amongst the other innumerable factors for China’s supply chain,” added the digital platform in its report.
As a result, Container xChange expects the box prices to stay at record highs, container flows to slow down and the capacity levels to deteriorate.
“This is a result of many more other disruptions over the past two years since the pandemic started” Container XChange CEO, Johannes Schlingmeier noted. “Lockdowns in China will further reduce capacity and cause a surge in already inflated shipping prices. The shockwaves will be felt across the US and America, and almost everywhere in the world.”
For India, the supply chain disruptions are mounting as exports out of the country show sustained growth signs.
“With monthly merchandise exports crossing the US$30 billion mark for the 11th consecutive month [in February] and touching almost US$375 billion during the fiscal till now, it goes to show we are on course to cross the US$400 billion exports target for the fiscal,” the Federation of Indian Export Organisations (FIEO) said, in a vein reflecting that bullish outlook.
Jenny Daniel
India correspondent
