Coronavirus troubles Exporters with Congestion Crisis in Container Supply

congestion crisis in container supply

Amid the outbursting coronavirus, the inability of importers in cargo collection piles up boxes at container freight stations and ports, hitting exporters with an uncommon congestion crisis in container supply.

Lockdown, the preventive measure of the pandemic, has pulled breaks of high-pacing trade, jerking the global container supply chains. While the current reports majorly focus on importers problems, experts forecast exporters as the ultimate victim of the congestion crisis in container supply. Be it abandoning of containers or lack of storage spaces at ports, the prolonging of any will eventually increase the troubles and liability issues for shippers.

Lack of storage spaces

The closed roads and suspended operations in lockdown are hindering the dockers and truckers from reaching ports to unload cargoes from ships and collect imported shipments from container freight stations and terminals, respectively.

As a result, the prime Indian gateways, including Chennai, Mundra, and Nhava Sheva, are stuffed with as massive as 50,000 boxes’ (at East coast gateway of Chennai) heaps. Considering all these ongoing and upcoming hardships of the shipping sector, experts have forecasted an unprecedented congestion crisis in container supply. Similar adversity was also estimated by Container Xchange, an online container logistics platform, in its Container Availability Index (CAx).

Forwarders also warn that this port congestion in some parts of the world will lead to equipment shortages elsewhere, increasing the accountabilities of those exporters who have already booked shipments with carriers.

Abandoning of containers

Be it due to the pandemic, lockdown, or economic downfall, consumer demands in India have tremendously fallen in the past couple of months. Forget about the new purchases; buyers have even started to cancel their existing purchase orders.

As per a source, even if the shippers successfully export containers, the liability will again fall on them if the boxes are not collected post-arrival. He justified his statement with CPT (Carriage Paid To) incoterms – an international commercial term, wherein the seller bears the risks and costs of delivering goods to an agreed-upon destination. But, if a consignee, willingly or unwillingly, does not accept the freight, its liability comes back to the shipper as per the B/L terms. B/L, Bill of Landing, is a legal document issued to the shipper by a carrier.

The source revealed that for now, things might not seem that tangled at shippers end, but a significant problem could arise after 3-4 weeks when shipping lines will start implementing their terms and conditions.

According to the source, the shipping conditions in other continents, countries, and port of destinations are no different from India. COVID – 19 has dramatically impacted consumer demand in America and Europe too.

Also read this article: 2020: A year of suddenly outbreaking market uncertainties

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