The granite traders in Prakasam district have been facing difficulties owing to logistic logjams caused in recent times due to the coronavirus pandemic. Factories located at the building material special economic zone at Gullapalli are unable to ship processed material to various countries due to the current logistic distress at various supply chain points. “The shipping lines have increased ocean freight rates sky-high, even though they are not allotting bookings to the USA from South India. We have been facing a shortage of empty containers for the past one year, and now due to high ocean freight rates buyers are moving their cargo slowly and we are in a kind of dilemma about product landing cost,” said M Shivaram, Chief Operation Officer (COO), Jyothi Granite Exports, a leading local granite exporter from the SEZ in Prakasam district.
Shivram whose company exports Granite slab, which has a huge demand in foreign markets, like USA, Canada, Italy, Algeria, Libya and Turkey, now facing logistic bottlenecks induced by the Covid pandemic. He said that his company is not able to achieve the anticipated turnover due to these logistic bottlenecks.
“We procure raw materials 100 per cent from domestic and 50 per cent consumables from foreign countries and for both activities we use road transport. But for the finished product’s export we use Krishnapatnam port in Andhra Pradesh which is located near to us after Chennai in Tamil Nadu. But in recent times all major shipping lines are shutting down their operations at Krishnapatnam for unknown reasons. And we have no other option but to use Chennai port for our export needs, but compared to Krishnapatnam port the transportation and customs facility charges are very high at Chennai port, and that incurs additional charges for us”, said Shivaram.
The shipping lines are quoting much higher rates, sometimes five six times higher, from the regular price of $1,500 to $2,000 to transport a container to foreign destinations. The Ocean carriers are making it imperative for shippers to buy add-on products like customs clearance and insurance to improve shipment prospects for their products. Moreover, the granite mining units are also facing shortage of labour as most of the migrant workers from Odisha, Rajasthan, Bihar, Uttar Pradesh and West Bengal have left to their native places during the second wave of the Covid pandemic.
The granite unit owners who are already reeling under logistic related problems are finding the 50 per cent increase in royalty by the State government as an additional burden. The escalation of diesel rates have also been posing difficulties for them to tap the export market for granite varieties in full.
The cost of processing the raw materials like the artificial stone material has also gone up phenomenally high. The cost of artificial stone material which was about Rs 8,500 per tonne earlier is now available for Rs 12,500 per tonne.
Shivaram urged the State and central governments to take initiative on shipping infrastructure immediately to stop the current spiralling ocean freight rates, otherwise the Granite traders who export most of their products cannot sell more quantities to foreign markets and can’t generate revenues.
