Shipping a container from India will cost nearly twice as much as what it costs to ship the exact same container from China, as outlined by a study from the Associated Chambers of Commerce and Industry of India.
In a pr release , ASSOCHAM claimed the average cost of shipping a container from India can be about $1,200. The same container from China would ship for $600, and for no more than $400 from Singapore, putting Indian exporters at a competitive disadvantage in the international market.
There are lots of reasons for the higher costs, the group reported. The first is that port productiveness in India lags behind most of the world. A ship’s turn-around time at India’s biggest sea port, Jawaharlal Nehru, is somewhere around 36 hours, while at the main ports of Shanghai, Singapore, and Dubai, it is under 12, according to ASSOCHAM. India’s sea ports also have higher cargo-handling costs than those other nations.
Further sending up costs is India’s two-tiered tax system, which leads to items being taxed when they transit state as well as national borders. The government of recently elected Pm Narendra Modi is attempting to reform the system by scrapping the two-tier system and changing it with a standard nationwide tax.
Container rates are largely a factor of demand and supply of shipping capacity, however other factors for example ease of access and landside costs may figure into the total costs.
ASSOCHAM also noted the amount of stops a truck needs to make as another factor pushing up prices. There are currently one hundred and seventy seven road check points and another 268 toll plazas on India’s roads, and toll lane automation is actually nonexistent.
A imbalance in hinterland infrastructure is an additional factor. As stated by the World Bank, 63.7 percent of China’s roadways are paved, compared to 53.8 % in India.
India and china have fragmented, unconsolidated transportation markets that make savings through economies of scale difficult to attain. C.H. Robinson has determined that 99 percent of trucks in China are owned by individuals or families. In India, the logistics provider estimates 80 percent of trucks are operated by smallbusinesses.
The more sophisticated infrastructure in China has made up for the governmental meddling and fractured trucking market that define both nations. The final result, ASSOCHAM stated, is a big difference in the costs of shipping containers from India and China.
Prime Minister Modi’s government seems to be mindful of these issues, and has started to take the appropriate measures to improve things. Early this month, ground was broken on part of the Sagar Mala infrastructure upgrade at the Jawaharlal Nehru sea port. Modi has ordered the Ministry of Shipping to make Sagar Mala its key goal, according to the Times of India .
The Sagar Mala project seeks to increase India’s growth through the interlinking of sea ports via the continuing development of road, rail and seaway connections. In addition, it requires investments aimed towards expanding port capacity and productivity.
Accompanying the order to the Ministry of Shipping was one to the Ministry of Road Transport and Highways. That order requested the introduction of a task force to research automation at Indian toll plazas and checkpoints with the target of lowering delays and the number of overloaded trucks on Indian roads. Automation of toll roads was on the list of solutions proposed by ASSOCHAM to decrease shipping costs.
In a pr release , ASSOCHAM claimed the average cost of shipping a container from India can be about $1,200. The same container from China would ship for $600, and for no more than $400 from Singapore, putting Indian exporters at a competitive disadvantage in the international market.
There are lots of reasons for the higher costs, the group reported. The first is that port productiveness in India lags behind most of the world. A ship’s turn-around time at India’s biggest sea port, Jawaharlal Nehru, is somewhere around 36 hours, while at the main ports of Shanghai, Singapore, and Dubai, it is under 12, according to ASSOCHAM. India’s sea ports also have higher cargo-handling costs than those other nations.
Further sending up costs is India’s two-tiered tax system, which leads to items being taxed when they transit state as well as national borders. The government of recently elected Pm Narendra Modi is attempting to reform the system by scrapping the two-tier system and changing it with a standard nationwide tax.
Container rates are largely a factor of demand and supply of shipping capacity, however other factors for example ease of access and landside costs may figure into the total costs.
ASSOCHAM also noted the amount of stops a truck needs to make as another factor pushing up prices. There are currently one hundred and seventy seven road check points and another 268 toll plazas on India’s roads, and toll lane automation is actually nonexistent.
A imbalance in hinterland infrastructure is an additional factor. As stated by the World Bank, 63.7 percent of China’s roadways are paved, compared to 53.8 % in India.
India and china have fragmented, unconsolidated transportation markets that make savings through economies of scale difficult to attain. C.H. Robinson has determined that 99 percent of trucks in China are owned by individuals or families. In India, the logistics provider estimates 80 percent of trucks are operated by smallbusinesses.
The more sophisticated infrastructure in China has made up for the governmental meddling and fractured trucking market that define both nations. The final result, ASSOCHAM stated, is a big difference in the costs of shipping containers from India and China.
Prime Minister Modi’s government seems to be mindful of these issues, and has started to take the appropriate measures to improve things. Early this month, ground was broken on part of the Sagar Mala infrastructure upgrade at the Jawaharlal Nehru sea port. Modi has ordered the Ministry of Shipping to make Sagar Mala its key goal, according to the Times of India .
The Sagar Mala project seeks to increase India’s growth through the interlinking of sea ports via the continuing development of road, rail and seaway connections. In addition, it requires investments aimed towards expanding port capacity and productivity.
Accompanying the order to the Ministry of Shipping was one to the Ministry of Road Transport and Highways. That order requested the introduction of a task force to research automation at Indian toll plazas and checkpoints with the target of lowering delays and the number of overloaded trucks on Indian roads. Automation of toll roads was on the list of solutions proposed by ASSOCHAM to decrease shipping costs.