Sky-high shipping costs squeeze Gujarat trade margins amid Gulf unrest
Gujarat exporters face crisis over rising logistics costs and West Asia uncertainty (AI image used for representational purpose only) Avoiding Hormuz Viranchi Shah Hitesh Bellani
Gujarat exporters face crisis over rising logistics costs and West Asia uncertainty (AI image used for representational purpose only) Avoiding Hormuz Viranchi Shah Hitesh Bellani Flight frequencies drop, cargo costs soar Samir Shah Textile units see impact on margins, orders Darshan Mashroo Rising input costs bitter pill for pharma companies Apurva Shah Solar power sector faces the heat Gujarat’s exporters are grappling with a steep rise in logistics costs and growing uncertainty on trade with the West Asia amid the ongoing conflict. Freight charges for a 20-foot container from Mundra port to Qatar have surged from around $400 before the conflict to $5,500-$6,000, while rates to Kuwait have risen from about $600 to nearly $5,000 per container, exporters said.Disruptions on traditional shipping routes have forced cargo to move through multiple transshipment points, increasing handling costs, transit times and insurance expenses. “The logistics chain has become far more complicated and expensive. Multiple handling points, rising fuel costs and war-zone premiums have pushed freight rates to unprecedented levels,” said exporters trading with Gulf countries.Merchant exporter Yogendra Malu said overseas buyers are unable to absorb the higher costs. “Crude oil prices are fluctuating sharply and purchases have become strictly need-based. At the same time, rising raw material prices in India are adding to domestic costs,” he said.Industry representatives said shipping lines have rerouted vessels, revised schedules and reduced capacity, leading to delays, cargo rollovers and congestion at key hubs.
War-risk insurance premiums have also risen sharply, with some routes facing restricted coverage.“Every week brings fresh changes in routing and schedules, and the cascading delays are impacting exporters and importers across sectors,” said Darshan Mashroo, vice-president of the Ahmedabad Custom Brokers’ Association.Such disruption has spread beyond sea freight. Reduced flight frequencies, revised operating protocols and capacity shortages have pushed up air cargo costs, too, causing congestion and shipment delays.“The rise in prices and new protocols have increased transportation charges,” said Samir Shah, president of the Cargo Agents Association of India. He added that exporters are often unable to pass on the higher costs because of intense global competition and stringent certification requirements.The impact is being felt across sectors including pharmaceuticals, perishables, dyes, engineering goods, electronics and technical textiles, where rising logistics costs are eroding margins and affecting shipment viability.Air cargo movement from Gujarat has come under pressure amid soaring freight rates, congestion and irregular flight operations.Parag Baraiya, president of the Ahmedabad Custom Brokers’Association, said freight charges for a 500kg shipment to Dubai have jumped from about Rs 150 a kg to nearly Rs 375 per kg. “Space congestion is being witnessed across several sectors because flights are not operating regularly. Cargo pile-ups and warehouse congestion are being reported at multiple locations,” he said.Industry players said the increase is directly eroding margins as most export orders are negotiated in advance, leaving little room to pass on higher logistics costs to buyers.Ahmedabad’s export-import ecosystem is heavily dependent on Middle East connectivity, particularly for pharmaceuticals, perishables, dyes and engineering goods.According to industry estimates, 55%-60% of the region’s air cargo moves through Emirates-operated connections.
The BriefWire