Freight hike, vessel crunch hit Panipat exports

Mukesh Tandon

Panipat, July 29

The high rise in global freight and shortage of ships have hit the export business at Panipat. As many as 3,000 containers are lying on the ports waiting for shipment due to shortage of vessels. Freight charges have increased five times in comparison to March.

The Russia-Ukraine war, inflation in Europe, USA and Israel-Hamas war have affected the textile business badly. Reeling already with the decline in business, the rise in freight has raised tension among exporters here.

Steep increase

• The freight for European countries was only $550 per container in September last year but in March 2024, it doubled to $1,000. Now, it is $5,200 per container.

Panipat, globally known as Textile City, has around Rs 50,000 crore turnover annually in the domestic market and Rs 15,000 crore worth of export. Handloom products, blankets, bed-sheets, cushions, bed-covers, top bed items, floor top items and other products are exported to European countries, USA, Japan, Australia and almost all regions of the world from Panipat.

As many as 450 export units are being run here and around 90 per cent export business of Panipat is with the USA and European countries.

Christmas is considered an important season for exporters as well as overseas buyers and for this, exporters dispatch their orders from May to August.

Raman Chhabra, president, Young Entrepreneur Society (YES), said that this is the peak season as Christmas is coming, but there is a big shortage of vessels at the ports. The main reason behind it is the trade war between China and America, he said.

Due to this trade war, the overseas buyers are demanding early delivery of their orders, he said. It would be tough to comment on the actual number of containers, but hundreds of those are lying on the ports as ships are not available, Chhabra said.

The products have been prepared with Christmas season colours. But if those reach late, those will be of no use and the exporters would have to bear that loss, he said.

Surender Mittal, an exporter, said that there is some problem in the shipping of consignments as the freight has been hiked very much and there is a shortage of vessels.

Vinod Chhabra, an exporter and Chairman, Haryana Chamber of Commerce and Industries, Panipat, said that the wars among Russia-Ukraine and Israel-Hamas have already hit the Panipat export industry. The industry has been facing a hard time for the past two years, he said. But the problems multiplied after the shipping companies raised the freight 5-10 times, he said.

The freight for European countries was only $550 per container in September last year but in March 2024, it doubled to $1,000. Now, it is $5,200, Dhamija added.

Similarly for the USA, the freight has increased three times in comparison to March 2024. Earlier, it was $2,600 but now, it is $9,200, he said.

Due to the freight rise, the small overseas orders have stopped as they can’t bear it. That has hit exports from Panipat, Dhamija maintained.

He said that there has been a 50 per cent downfall in exports over the past two years due to high inflation and recession in USA, European countries and other adjoining countries due to the long war among Russia-Ukraine and Israel-Hamas.

Lalit Goyal, president, Panipat Exporters’ Association, said that the new policy of the USA and Europe against China has hit business in India. There was a huge shortage of vessels as all of those have booked orders from China, he said. USA and Europe have increased anti-dumping duty upon China which would come into effect from August 1. That’s why shipping companies have booked China’s products on priority and freight has been increased drastically, he said. All the ports, including Singapore, Indonesia, Vietnam, Dubai and Mudra port in India, are jam-packed with containers at this time, he said. We are hoping that the situation may become normal after August 15, Goyal maintained.