Exporters a harried lot over rising ocean freight, steel prices

Vijay C Roy
Tribune News Service
Chandigarh, December 23

Already hit by the Covid pandemic, exporters in the region are battling against exponential rise in ocean freight and steel prices. They are of the view that these two factors are adversely impacting their margins and working capital.

According to them, the ocean freight has risen by 60-100% since August this year. The freight for a 20-foot container to be shipped to New York has shot up to over $3,200 in December from $2,400 in July. Similarly, it costs $1,800 to ship a similar container to Rotterdam (Holland) as compared to $1,150 in July. They have urged the government to intervene and regulate the operations of shipping companies.

Exporters’ body Federation of Indian Export Organisations (FIEO) has informed the government about an estimated $40-billion export loss in the current fiscal.

“There is an exorbitant increase of freight by shipping companies and it is hurting the exporters who work on thin margins,” said SC Ralhan, a hand tool exporter from Ludhiana.

Similarly, constant increase in steel prices is also hurting the exporters. The price of steel ingot — one of the key raw materials — has increased from Rs 31,000 per tonne in July to around Rs 40,400 in December. The industries which bear the brunt of rising steel prices include hand tools, auto parts, castings and bicycle & bicycle parts.

“Our exports have been rendered uncompetitive. The government should intervene into the matter,” said Sharad Aggarwal, president, Northern Chamber of Small & Medium Industries.

The exporters rued that there is a shortage of containers due to fall in imports and they have to shell out anywhere between Rs 20,000 and Rs 25,000 to bring empty containers to Punjab from ports. Those who have committed orders in hand are the worst affected.