Red Sea container crisis: Impact on exports to Africa and Latin America india business news
CHENNAI: A container crisis is looming in the Red Sea due to geopolitical issues, which has the potential to hamper India’s growth. export For Africa and Latin America.
According to exporters, shipping freight rates Expected to double on some routes with exports of petroleum, automobileSeafood and agricultural commodities are likely to be affected.
Exporters are complaining of container shortages at ports on the West Coast and have requested leasing companies and shipping lines move some containers from the East to the West.
FIEO Director General Ajay Sahay said, “Petroleum exports are expected to be the most affected, while overall exports will also be affected and we see this problem continuing for some time.”
Players dealing in agri-commodities and seafood “may see a significant impact due to the perishable nature of their goods and/or lower margin profiles, driven by rising freight costs,” a CRISIL report said. “limits their ability to absorb risk”. Players operating in sectors like textiles, chemicals and capital goods may not be immediately affected, but a prolonged crisis could make these sectors vulnerable as well as “the pause on orders will aggravate the working capital cycle”.
Automobile companies are taking into account freight growth and long-haul shipments in margin calls. During the quarterly results call, Rakesh Sharma, executive director, Bajaj Auto, explained what the pinch means for automobile companies. “The Red Sea problem has caused delays of about three weeks to parts of Latin America and Africa and doubled freight rates to many destinations,” he said. There was some impact on shipping availability in December-January, he said. “Alternative routes have been established and order levels from channel partners have been adjusted to take into account longer shipping times,” he said.
“Inflation has started to ease but the (revival to peak levels) may be delayed due to availability of Red Sea containers,” TVS Motor CEO KN Radhakrishnan said.
According to exporters, shipping freight rates Expected to double on some routes with exports of petroleum, automobileSeafood and agricultural commodities are likely to be affected.
Exporters are complaining of container shortages at ports on the West Coast and have requested leasing companies and shipping lines move some containers from the East to the West.
FIEO Director General Ajay Sahay said, “Petroleum exports are expected to be the most affected, while overall exports will also be affected and we see this problem continuing for some time.”
Players dealing in agri-commodities and seafood “may see a significant impact due to the perishable nature of their goods and/or lower margin profiles, driven by rising freight costs,” a CRISIL report said. “limits their ability to absorb risk”. Players operating in sectors like textiles, chemicals and capital goods may not be immediately affected, but a prolonged crisis could make these sectors vulnerable as well as “the pause on orders will aggravate the working capital cycle”.
Automobile companies are taking into account freight growth and long-haul shipments in margin calls. During the quarterly results call, Rakesh Sharma, executive director, Bajaj Auto, explained what the pinch means for automobile companies. “The Red Sea problem has caused delays of about three weeks to parts of Latin America and Africa and doubled freight rates to many destinations,” he said. There was some impact on shipping availability in December-January, he said. “Alternative routes have been established and order levels from channel partners have been adjusted to take into account longer shipping times,” he said.
“Inflation has started to ease but the (revival to peak levels) may be delayed due to availability of Red Sea containers,” TVS Motor CEO KN Radhakrishnan said.
