2 Indian firms to make cargo containers to counter China dominance

A shortage of shipping containers has led India’s domestic players to begin the process of manufacturing cargo containers indigenously. The Indian Express reported that Braithwaite and Bharat Heavy Electricals Limited have received developmental orders from the Container Corporation of India (CONCOR), which owns 85 per cent of the container movements market, to try and make 1,000 containers each.

The first inkling of container shortage appeared in November last year when exports from China surged 21% from a year ago as the country’s industrial engine shipped huge amounts of appliances, toys, clothes and personal protective equipment currently in high demand across the world.

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It was felt that there was a global shortage of shipping containers, which sent cargo costs to record highs, hampering manufacturers in filling fast-recovering global goods orders.

According to The Indian Express report, India does not have the capability to manufacture its own cargo containers. China is the global leader in cargo containers and routinely wins global tenders to manufacture and supply containers across the world.

“In China, they have integrated the container manufacturers and steelmakers, giving them a huge advantage. We have to do a lot of backward integration. By March-end, we will be able to provide the first prototype,” Yatish Kumar, chairman and managing director of Braithwaite, told The Indian Express.

According to China Container Industry Association, the average container turnaround times have gone up to 100 days from 60 days due to COVID-19-related handling capacity cuts in Europe and the US. Since most of the international air passenger fleet, which often carries cargo, was grounded during the peak pandemic curbs, the demand for maritime freight rose sharply.

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The Indian Express quoting officials said each component needs to be made from scratch, since India has never made them. So a PSU like Braithwaite needs to install a rolling mill to churn out these unique components.

According to Seatrade Maritime News, freight rates have shot up by 200-400%. Besides, there have been cancellations of scheduled vessels, even as the rescheduling of regular calls has created a demand for container slot allotments. This is affecting India’s exports and is also leading to escalating freight cost, it said.