Tirupur's clothing industry is concerned about container scarcity and lockdowns

21th August 2021, Mumbai:

Unfundamentally rising air freight, a lack of sea freight containers, and a six-week shut down due to the Covid second wave have resulted in over Rs 2,500 crore worth of clothes being stranded in Tirupur.

Worse, they may never make it to other markets, instead of ending up in India at a fourth of the price during Diwali.

During the peak production months of April and May, Tirupur was shut down for approximately 6 weeks, either partially or completely. As a result, there was no manufacturing, and orders could not be fulfilled.

When the lockdown was lifted, the outstanding orders were fulfilled, but the containers were no longer available for shipment, and air freight prices skyrocketed.

“We won't be able to transport the products via plane. At many airports, there is a massive backlog. Freight prices have now increased to Rs 300 per kilo, up from Rs 100 per kilo before Covid.

We are prepared to pay, but there is a line, and the congestion at the airports is only getting worse,” Raja M Shanmugam, President of the Tirupur Exporters Association, said (TEA). The issue with ocean freight is becoming worse. Shipping to Europe now costs $5,000 per container, up from $1,500 before to Covid, while shipping to the United States now costs $14,000, up from $3,000 prior to Covid,” he added.

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“Around Rs, 2,500 crores worth of clothes are hanging around in various locations, and exporters are haggling with companies to avoid losing money. The terrible thing is that some of them are seasonal goods, and if they miss the window of opportunity to sell in international markets, they become obsolete.

Either the brand must unload it on "sale" for roughly a quarter of the price, or we must remove the brand label and sell it in India, which is not commercially viable,” he explained.

The TEA has raised the issue with the state and federal governments to assist alleviate airport congestion. He said, "We have addressed the administration and are awaiting a response."

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