India Diwali Market Overview

As the November 12 Diwali holiday approaches, we caught up with Tandem Global Logistics India’s Executive Director, Lavin Shetty, for local perspective.

Q: Lavin, please provide a brief overview of Diwali.
A: Diwali, the Festival of Lights, is a significant holiday marking the return of Prince Ram from exile and is celebrated by Hindus, Jains, and Sikhs worldwide. It’s a time of joy and prosperity, with people spending money on shopping, gifts, and more. For businesses, Diwali presents opportunities for sales, new product launches, and promotions. The celebrations extend globally due to the Indian diaspora, with events, cultural displays, and traditional clothing.

Q: What typical booking volume trends occur around the Diwali season?
A: Diwali, has a significant impact on the logistics and transportation industry in India. During Diwali season, there is usually an increase in demand for goods, including consumer goods, clothing, and gifts, both domestically and globally. Volumes and booking activity increase accordingly, with air freight often surging. Companies tend to book shipping services well in advance of Diwali to secure space and capacity. This results in longer lead times for booking ocean containers or air cargo slots. Capacity on vessels and airplanes can become tight, leading to potential delays and higher shipping rates. Diwali is considered a peak season for imports in India as well. Companies often import a large volume of goods to meet the festive season’s demand.

Q: What are the key challenges faced by the air and ocean freight and supply chain sectors pre and post the Diwali holiday?
A: In the lead up to Diwali, the demand surge can induce cargo capacity constraints, resulting in transit delays and higher rates. Ports frequently experience delays during this time. Congestion at ports and on roads can be expected. Tight warehouse space and labor shortages also pose problems. Post-Diwali, businesses run the risk of building excess inventory, resulting in additional storage costs. At the same time, increases in returned goods require extra resource allocation for reverse logistics.

Q: What are the solutions to these challenges?
A: To successfully navigate the Diwali season, shippers need to plan well in advance, optimize inventory management, secure adequate labor, and secure efficient logistics and transportation solutions. Keeping a close watch on supply chain updates and maintaining open communication with your logistics providers are also essential steps.