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About $1 billion of imported machinery, spares and steel are stuck at foreign and Indian ports.aniruddha chowdhury/mint
About $1 billion of imported machinery, spares and steel are stuck at foreign and Indian ports.aniruddha chowdhury/mint

Large foreign ships avoid Indian ports due to congestion

The ports are preparing for a phased exit from the lockdown, as the Centre relaxes measures to kick start economic activity

Large foreign ships carrying container cargoes are avoiding congested Indian ports due to difficulties in loading and unloading goods, which is likely to affect the flow of material across sectors, said industry executives.

The ports are, however, preparing for a phased exit from the lockdown, as the Centre relaxes measures to kick start economic activity.

The congestion is because many importers are not willing to move cargo from ports due to low consumer demand, besides shortage of trucking capacity. The waiver of demurrage—charge payable for storage—by the government, which was meant to provide relief to the industry during the lockdown, are being misused, they said.

About $1 billion of imported machinery, spares and steel are stuck at foreign and Indian ports, said Capt B.V.J.K. Sharma, chairman, shipping, FICCI Infrastructure Committee. “People are getting free storage and are not willing to move their cargo. Generally, goods in transit area stays for 3-4 days, but cargoes are now lying for 45-50 days," he said.

Sharma said choking port operations and deterring foreign ships because of longer waiting time entails higher costs. Typically, low-value goods are not being picked up by the importers.

Foreign ships also have to contend with the possibility of the crew being quarantined if the sailing time from the last port was less than two weeks, and the vessel comes from a covid-hit country. Typically, large container ships travel through several ports to ensure commercial viability.

Container ship operators have been carrying a record 13% less cargo to capacity over the past month, as curbs have battered trade demand.

Shipping lines have withdrawn vessels with a capacity totalling about 3 million containers to conserve cash and maintain freight rates.

Steve Felder, managing director, Maersk South Asia, said there were challenges to the logistics ecosystem, such as an acute shortage of truck drivers and labourers at Indian ports. “We are trying to mitigate these obstacles through options available, one such being moving as much cargo as possible from road to rail."

“However, congestion at some ports is constantly rising due to lack of evacuation of imported cargo and thus clogging the entire ecosystem. This means that there is no space for export cargo to enter the ports. Therefore, in some cases, it is forcing our vessels to skip certain ports as the vessel can neither discharge import cargo nor load export cargo," he added.

Shipping ministry officials said the situation on the ground was improving and ports are not too congested at the moment. For instance, only 54% of the space is being used at Jawaharlal Nehru Port Trust, with the remaining area being vacant, an official said, requesting anonymity.

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