Textile Exporters Hold Back Shipments Amid High Freight Costs
The Indian Commerce Ministry is monitoring developments on the situation at the Red Sea, amid textile and garment exporters holding back their shipments owing to fears about higher freight costs.
The cost of freight and insurance has risen due to ships being compelled to avoid the region and take a longer route around the Cape of Good Hope.
“Shipments are being held back by exporters because they are feeling the pinch of additional freight costs,” Business Standard reported a senior government official as saying.
“If this prolongs, then it is a matter of concern adding that containers could face delays of 12-14 days in their turnaround time although there was no shortage of containers,” he added.
“We have not got the signal yet whether exporters abroad are holding back shipments,” the official stated.
While exports to the US west coast are intact, shipments to Europe, North Africa, and West Asia have been affected.
Another official said many consignments were being escorted with security in high seas with help from the Ministry of Defence due to the challenges on the Red Sea.
Danish shipping giant Maersk will divert its vessels around the Cape of Good Hope for the foreseeable future.
“The situation is constantly evolving and remains highly volatile, and all available intelligence confirms that the security risk continues to be at a significantly elevated level,” Maersk said in a statement.
