Sharp increase in freight on exports has investors worried

Ambika Sharma

Tribune News Service

Solan, November 6

A multifold increase in the freight of 20-feet containers bound for various destinations abroad from the state’s industrial hub of Baddi-Barotiwala-Nalagarh (BBN) has left investors worried. The input cost has increased sharply.

An acute shortage of containers owing to a decline in imports has increased the gap of supply and demand, thus triggering a freight hike. Figures obtained from the BBN industrial cluster, which houses 89 per cent of the state’s industry, states that as against the cost of $650 to $750 (US) for a container bound for the Hamburg port in Germany and the Rotterdam port in Holland, the price has skyrocketed to $1,800 to $2,500. A consignment headed for the Gdynia port in Poland and the Odessa port in Russia, which would earlier cost between $1,000 and $1,100 is now available for $1,900-$2,600. “The freight of a 20-ft container for the Felixstowe port in the UK, which was priced between $750 and $800 about two months ago, has increased to $1,900-$2,500. For the LA port in the US, it has increased to $4,000 from $1,500-$3,000. The widening gap between the demand and supply had triggered this hike and despite this the containers are not available on time, ” rued Sandeep Verma, director, Ashoka Spanners Private Limited, Baddi, which has been exporting engineering goods to Europe and the US for the last 35 years.

Verma said, “Investors are facing huge losses as payments are stuck due to a delayed shipment of the goods for the last two months. The disruption of rail traffic has further created a shortage of imported scrap. The price of raw steel has gone up by Rs 5 per kg and the input cost has increased by 10-12 per cent.”

Rajiv Aggarwal, who runs Him TechnoForge that exports auto components, said, “The current situation has forced me to dispatch key components to Germany and the US by air despite incurring additional expenses. Not only have some export orders been cancelled, but this impasse of rail traffic disruption and lack of containers is taking away the key opportunity of investment.”

Aggarwal said the government should intervene and resolve the matter at the earliest.