The nationwide lockdown has choked up Indian ports amid a shortage of workers to unload and transport goods, posing a massive challenge to the country’s trade, industry officials said on Thursday.
Nearly 90% of India’s exports and imports by volume and 70% by value are routed over the oceans, including products ranging from chemicals for use in agriculture, components for electronic products to automobiles.
That means a bulk of Indian industry and manufacturing will be grappling with weeks and months of uncertainty on sourcing of raw materials and export of goods, even after the current lockdown is fully lifted.
“If you don’t release the space, then you can’t work. you have to evacuate cargo from ports ASAP. Currently, all cargo space is fully occupied at all major ports," said Capt. B.V.J.K Sharma, chairman of shipping at FICCI Infrastructure Committee.
The problem is twofold—cargo can’t be unloaded from ships due to a shortage of workers, and goods can’t be transported from ports to the hinterland due to a shortage of trucks.
There are concerns that some firms may back away from taking delivery of goods since the lockdown has hit demand in segments like electronics and automobiles which are seen as non-essential.
Moreover, legal disputes are likely to arise on payment of demurrage on goods that have not been offloaded from ships. All these could lead to a prolonged snarl at ports, industry officials said. Demurrage is the additional charge or penalty imposed for a delay in loading or unloading goods.
Last week, the shipping ministry advised all ports to invoke the force majeure clause in their contracts. “However, these orders do not impact or dilute the fact that each major port needs to remain operational during the covid-19 pandemic and continue cargo operations in all respects," an official statement said.
Steve Felder, managing director, Maersk South Asia, said the port congestion is not only due to lack of workers like truck drivers, but also customs house agents.
“On the shortage of truck drivers, we are supporting our customers to move cargo on rail, which is doing much better than road transport in the current lockdown situation," Felder told Mint, adding that they are in constant touch with the authorities to iron out any hindrances in processes and smoothen the flow of cargo. “Unfortunately, despite instructions and advisories from the government and relevant authorities, which deem our services as essential, we continue to face manpower shortage that is hampering the movement of cargo. We continue to urge customs house agents as well as labour to support us in clearing the cargo as it might include crisis-essentials and we cannot let the CFS (container freight stations), yards or ports to get congested at this time," he said.
A shipping ministry official said the government is closely monitoring the situation and trying to address the manpower shortage.
The outbreak of covid-19 has affected more than 100 countries, including India’s top trading partners China and the US. Both nations accounted for 10% each of the total value of trade—import and exports—in 2018-19, official data showed. China accounted for 13.68% of total imports into India. The US, which has the largest number of coronavirus infections, is one of the biggest export markets for India, accounting for almost 16% of its total exports in 2018-19.
Deepak Sood, secretary general of the Associated Chambers of Commerce and Industry of India, said it will take at least three months from the end of lockdown for resumption of normal exports and imports.