Freight charges for solar module imports to remain high

2021-05-12 16:39:00 Shipping News

The Indian solar developers and engineering, procurement, and construction (EPC) service providers have been hit hard by the increase in freight charges and the shortage of raw materials that have pushed the prices up for projects and scrambled timelines.

With the second wave of the Covid-19 pandemic ravaging the country, it is becoming increasingly difficult for developers to complete the projects on time, and as things stand, it will take some time before normalcy returns.

The freight charges saw an upward trend a year back with the outbreak of the Covid-19 pandemic

The freight charges saw an upward trend a year back with the outbreak of the Covid-19 pandemic. Since then, its trajectory has been on an ascending curve, adversely impacting the import of solar modules to India.

Speaking on the prevailing situation, Sandeep Shivhare, Senior Executive-Marketing at Krishnapatnam Port, said, “This current trend of freight charges hike caught up as the Covid-19 pandemic gathered momentum in 2020. Before the virus hit the Indian shores, the shipping companies had cutthroat competition, and the rates were very competitive, hovering in the range of $500 (~₹37,030)-$600 (~₹44,436) per 40-feet high cube (HC) container. Now, the charges have spiked up to nearly $3,000 (~₹222,182)-$3,500 (~₹259,212) per container.”

Pointing out another crucial reason behind the price rise, Shivhare added that the freight prices for importing modules have significantly increased because of a shortage of containers

It makes sense to model higher freight charges for the next 6-12 months

“Freight charges are high all over the world, and shortage of shipping containers is also widespread. Macroeconomic policies and spending patterns influenced by Covid-19 in the US and Europe are big drivers behind these trends. There is so much uncertainty in the markets right now that it makes sense to model higher freight charges for the next 6-12 months when bidding for projects,” said Raj Prabhu, CEO of Mercom Capital Group.

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