Industry seeks govt intervention to address container shortage at inland container depots

Mumbai, February 22, 2022:

The drug industry has urged the central government to engage with shipping lines to address shortage of containers at Inland Container Depots (ICDs), leading to rise in transportation costs for inland manufacturers, thus impacting the supply chain of pharmaceutical products.

Efficient supply chain is very critical for the pharmaceutical sector as medicines are expected to be available at the right place at the right time at an affordable cost in order to save lives.

“The availability of containers has considerably eased as compared to May-June 2021 levels, however there exists considerable constraints in availability of the containers at ICDs. This also increases the transportation costs for inland manufacturers as in many cases, they have to catch the containers at the ports instead of ICDs. This impacts the country’s drug supply chain,” said Indian Drug Manufacturers’ Association (IDMA) in a representation to the department of pharmaceuticals (DoP) and commerce ministry.

“The sea freight levels have escalated several fold from what they used to be in 2019-2020 before the onset of the pandemic. The rates have now stabilized after intervention of the government, since the last 4-5 months. However, since they are quite higher than previous levels, the elevated freight costs are seriously impacting the overall cost of goods exported by us. This impacts the cost efficiency of Indian pharmaceutical products and affects our competitiveness,” added the industry body.

Appreciating the government for its praiseworthy work in this matter, IDMA urged it to continue its efforts to engage with the shipping lines to address the above concerns, as freight has a direct impact on availability and cost of pharmaceuticals exported.

During the pre-Covid period, several shipping lines were available, however, in the Covid-period, only limited shipping lines are available. Thus, rates and lead times have increased many folds.

Shipping lines have added many surcharges, thus resulting in a significant rise in overall cost of shipping goods by sea mode.

The free period for empty containers provided by shipping lines earlier used to be between 10-14 days. The current free period has been reduced to 7-8 days, further impacting the transaction cost. Pharmabiz