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Post-pandemic Era : Rebound and Refocus

During the past one and half years, the shipping and logistics sector has been through a perfect storm induced by the pandemic and its after affects. It all started with lockdowns in the US and European markets resulting in steep decline in exports from Asia. Shipping lines underwent consolidation and capacity idling was order of the day. Following a dip in the COVID-19 wave these export markets opened up placing huge export orders. The ports in the western parts of the globe were not prepared for this sudden influx of containers which resulted in huge congestion. Containers were being rushed to export destinations but return of empties was not at the same pace. Shipping lines did their bit to reposition empties, but the efforts fell short of demand causing acute shortage of containers in Asia. Ocean freight rates have increased 3.5-fold (250%) over the past six months.

Gauging the graveness of the scenario Indian government under the Make in India initiative came up with a blue print to manufacture domestic containers. Other landmark initiatives such as the Major Ports Authority Bill 2020, new tariff authority to replace TAMP and PM Gati Shakti Plan will focus at reducing logistics cost and making exports competitive.