MARKET UPDATE ON LOGISTICS IN INDIA - CHAOS IN PORTS
Prime Minister Modi last week announced a three-week lockdown. There’s a lot of confusion on whether the measures would halt operations at India’s ports, according to the Indian newspaper The Economic Times.
Logistics were said to be exempted from the restrictions as the Indian Ministry of Shipping announced on 23 March 2020 that “transport service for carriage of goods by water and any service connected with loading, unloading, movement or storage of goods in any port are an essential service”.
But on the other hand the government has told the major ports that the coronavirus fight is a valid reason to halt some port operations and advised ports to consider the Covid-19 pandemic as grounds for invoking force majeure.
P.L. Haranadh, deputy chairman at Visakhapatnam Port Trust, a government-owned port told the Economic Times that “operations have slowed because several staff may be reluctant to come to work fearing health issues. With limited resources, we’re doing our best to ensure that supplies of essential commodities, such as coal, crude oil and containers are maintained.”
Nevertheless “there are widespread reports of disruption across land, sea and air”, according to The Loadstar. Several sources indicate that there are serious problems with clearance of import cargo by the customs, lack of inland trucking capacity, … resulting in chaos. Drivers would have suspended their services as they are afraid of the virus, also due to lack of government permits, police controls, inter-state border closings, etc.
Additionally a 14 day quarantine on ships calling Indian ports has caused delays and extra costs for shipping lines.
“The movement of export and import containers by road has virtually come to a standstill,” Jawaharlal Nehru Port Trust [JNPT] said in a trade advisory. “While vessels continue to be handled at all the port terminals, the gate-in of export and evacuation of import containers is not happening.”
We got confirmation from several logistics companies that they had to suspend their operations temporarily and that there’s a backlog of shipments to be cleared.
Moreover, courier services are not operational anymore, resulting in envelops with transport documents (e.g. certificates, Bill of Lading, …) that are stuck somewhere and blocking a timely cargo release.
Therefore Shipex strongly advises against shipping new cargo to India for the time being. Shippers that want to proceed with new shipments have to take into account serious delays, possible discharge of containers at other ports and/or huge extra costs.
Please contact our team with regard to your pending shipments.