NEW DELHI : Indian government has formed a committee to help Indian exporters and importers access shipping facilities amid a supply crunch in global shipping sparked by the Russian invasion of Ukraine.
The Committee Chairman Anil Devli, CEO of INSA, will look into the issues faced by Indian traders who are finding it difficult to get access to shipping facilities. Other members of the panel include representatives of Shipping Corp. of India (SCI), Association of Multimodal Transport Operators of India and Federation of Freight Forwarders’ Associations in India (FFFAI).
Directorate General of Shipping said the committee has been formed “in view of the Russia-Ukraine crisis and the requirement of shipping.”. The committee will “interact with the trade to find suitable vessels for their requirement,” it said.
The conflict has put Russian liners out of business due to strict sanctions imposed by the US and European Union. Also, several European ports are not allowing Russian vessels to berth and ships are stuck in ocean due to blockade in the Black Sea and Sea of Azov. Further, according to industry executives, most of the major shipping lines are European, which are not accepting Russian containers, impacting several India-bound Russian containers.
The development comes amid a growing container and ship shortage, leading to a surge in freight rates. According to data provided by the Indian National Shipowner’s Association (INSA), the fleet size owned by Russia is about 3,000 ships of 18.1 million gross tonnes, which is around 1.2% of global tonnage. The gross tonnage of Indian ships is about 0.8% of world tonnage.
Devli said the panel will meet thrice a week. “The committee will take up the issues in its meetings faced by the trade and help them get shipping access,” he added.
Mint earlier reported about container rates going up 10-fold in less than a fortnight, while war insurance premiums have risen.
Along with the shortage of transporting facilities, the surge in crude oil prices has also been a cause of worry for the industry, which was already severely hit by the pandemic. Brent crude surged to $139.13 per barrel on Monday, its highest level since 2008.
Makrand Pradhan, Chairman of Total Transport Solutions Ltd said: “In the past one week, shipping lines are not accepting the cargos for Russia, but some carriers are accepting them. However, the freight levels are three times high now. A 20-foot container that used to be $6,000 for St Petersburg from Nhava Sheva has now gone up to $17,000-18,000,” Pradhan said.