Chennai, Tamil Nadu
The shortage of containers has resulted in a 4x to 6x increase in logistics cost that is affecting the auto industry. The current waiting period for a container is 1-2 weeks from 24-48 hours before.
Dependence on Chinese container manufacturers and foreign shipping lines is troubling the auto industry. Shortage of containers and the resultant 4x to 6x increase in logistics cost is affecting the auto component exporters and the auto industry, according to Deepak Jain, President, Automotive Component Manufacturers Association of India (ACMA).
The current waiting period for a container is 1-2 weeks from 24-48 hours before.
ACMA President noted that the container shortage started in H2FY21. Exporters to the US and EU have been hit badly as the costs have increased. The cost of a 40ft container to the US is now $6000 from $2000 last year. Similarly, the cost of a 40ft container to the EU has increased to $5000 from $1500 last year.
ACMA further announced that component exports in FY21 had fallen 8% (second year in a row) to $13.3 billion compared to $14.5 billion in FY20 and $15.2 billion in FY19. India’s top export destinations are the US, Germany, Thailand, Turkey and the UK.
The only good news is that the exports to China have increased and China is now one of the top 10 export destinations. It recorded $360 million in Indian exports, up 14% from $320 million in FY20.
Source – The Times of India
Image Source: Photo by CHUTTERSNAP on Unsplash
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