Ahmedabad: Textile deliveries are facing disruptions due to a shortage of containers and increased freight costs, affecting both domestic and export orders.
Denim exporters are grappling with a backlog of shipments, with around 500 containers of fabric ready for export but stuck in warehouses due to the shortage. Yarn manufacturers are experiencing similar issues.
Industry experts note that the inability to deliver past orders is preventing new ones from coming in. Vinod Mittal, a denim manufacturer in Ahmedabad, stated, “The denim industry saw a revival in the last quarter of FY24, but the situation has been challenging since then. There is steady offshore demand, but we are unable to export due to container issues. Consequently, the demand for godowns to store stock has increased, as have their rents. Until we deliver earlier orders, we cannot secure new ones.”
Industry estimates indicate that the denim sector alone has seen a stockpile of around 500 containers (20 tonnes each) in Gujarat. This has reduced capacity utilization of units to 60-70% from around 90% three months ago.
“Exporters are unable to ship their manufactured goods due to the unavailability of containers. As a result, godowns available for hire are in high demand, which attracts additional costs at a time when payment cycles are stretched. This is causing a working capital shortage for manufacturers,” explained Kumar Agarwal, another denim manufacturer in Ahmedabad.
Jayesh Patel, senior vice president of the Spinners' Association Gujarat (SAG), added, “Exports have become costlier due to the Red Sea crisis. Additionally, shipping companies get better pricing from China, so they prefer taking containers from there. This has reduced the availability of containers here and affected our competitiveness in the global market. We are seeing higher stockpiling with full godowns, and payment rotations have been affected.”
