Upkar Singh Ahuja, president of the Chamber of Industrial and Commercial Undertakings (CICU), said that doing export business has become unviable due to a very high increase in shipping freight charges.

The cost of doing business has skyrocketed manifolds due to the spike in freight of the shipping containers. The freight rates for some countries doubled, and in some cases, they have spiked up to 40-45 per cent . Moreover, there is a shortage of containers that is causing delays in the delivery of the goods. Since last year, there have been fluctuations in the freight rates, but businessmen say the current rates are the highest ever. Upkar Singh Ahuja, president of the Chamber of Industrial and Commercial Undertakings (CICU), said that doing export business has become unviable due to a very high increase in shipping freight charges. On average, there has been an increase of 40-45 per cent, and there are several countries where sending export consignments now costs more than double.

He further added that there is a widespread disruption in the supply chain and a shortage of containers can make matters worse. Due to this issue, exporters are compelled to bear increased expenditure and cost of doing business but also leading to a drop in exports due to an increase in investment. Many businessmen are now switching to local sales.

Export Business

Due to this issue, exporters are compelled to bear increased expenditure and cost of doing business but also leading to a drop in exports due to an increase in investment.

The importers are facing many challenges now due to taxes and side duties on imports. Moreover, freight cost has also become expensive to carry on with the business. Roughly, the freight rate for importing one container from China’s Guangzhou to Tughlakabad in India has now gone up to 9,000 USD, which earlier was 4,800 USD, an almost double increase. Now, the importers are forced to pay for rising costs from their pockets and they have to bear huge brunts on pockets. There has been a big increase in the freight rates of export containers. About six months ago and even last year, the export freight for destinations like Dubai was about 200 USD, which now is 1,500 USD. In the case of export freight rates for the USA, the earlier cost was about 2,000-2,500 USD per container and now it has skyrocketed to 12,000 USD, which is almost six times. 

The average container price (40 feet) from India to the US also rose three to five times. Usually, the importer bears 90 per cent of the cost for shipping the goods, the price hike has affected them a lot. Foreign buyers have reduced their orders and some have even canceled orders.

Dubai

Foreign buyers have reduced their orders and some have even canceled orders.

%d bloggers like this: