Due to shortage of sea containers, exporters opt for the costlier mode to move consignments.

Due to a severe shortage of sea containers, exporters in the textile hub of Tirupur in Tamil Nadu are shifting to air transport to ensure that garments hit the shop shelves abroad on time for Christmas and New Year sales. The shift to air transport will cost exporters significantly more but they are willing to absorb it as they don’t want to risk losing clients by failing to deliver on time.

The Covid pandemic, the Suez Canal blockage in March, suspension of operations at China’s Yantian port in June, and the recent typhoon in China affected global container trade resulting in huge congestions at certain ports in the US, Europe and China. This, in turn, caused a major shortage of containers.

Normally consignments reach Europe in 26 days and the US in 35 days and buying sequences are designed accordingly. However, due to the non-availability of containers, the delay has become unavoidable and in such cases air mode is used and consignments take a maximum of one week to reach the destination.

Exporters now don't have a choice but to shell out ten times the cost to transport by air, said Raja M Shanmugham, Tirupur Exporters’ Association President.

The textile industry is forced to shift to air from sea because garments are mostly seasonal and need to reach the stores on time, otherwise the goods would become outdated. For example, for Christmas and New year targeted products need to reach the shelf by the end of November.

CMN Muruganandan, Partner, Gomatha International, Tiruppur said that the shortage of containers is killing the industry, and companies are forced to take the heavy burden of additional cost. Even by air, there are likely to be space constraints, he added. “If we don’t supply this year looking at the additional cost, clients will source it from China, Taiwan or Vietnam. This will badly hurt the industry,” he said.

Every year, between June and September, exporters from Tiruppur send garments to global markets worth nearly Rs 8,000 crore, he said.

Published On : 02-08-2021

Source : Business Line