In an emerging situation that has potential ramification for UK exporters, India’s already congested ports face further turmoil after Prime Minister Narendra Modi has suggested that the country’s three-week lockdown may have to stay in place beyond April 14 for a further two weeks.
With more than 50,000 stranded containers already spread among the 23 container terminals at the ports of Chennai, Kamajarar and Kattupalli alone, there are fears that an extended lockdown will significantly add to this number nationally, further complicating an already difficult position.
While the bulk of the inbound containers have already cleared Customs formalities, their destination points are under (possibly extended) lockdown and cannot take delivery of the cargo.
In a further complication, authorities have made it compulsory for ports, terminals and shipping lines not to charge detention and demurrage during the lockdown, so this doesn’t push any importer to clear the goods, as the major consumption is domestic and there is a major drop on the demand side for non-essentials.
In an effort to clear the ports and terminals over the next 10 days the police are locating the drivers and issuing passes to return to Chennai so that container movements from Chennai, Kamajarar and Kattupalli can recommence immediately.
Jawaharlal Nehru and Mundra Ports are also suffering congestion with containers being shunted to container terminals, to try and maintain operational effectiveness at the ports.
Maersk, MSC, CMA CGM, Hapag-Lloyd and Cosco have reportedly omitted calls at the ports due to the backlog.
With over over 30,000 teus transferred, in just over a week, to terminals at Jawaharlal and the importers taking hardly any deliveries, the resulting pile-up of import laden inventory is an unprecedented challenge, and it is anticipated that in the next few days, most of the CFSs will reach their “holding capacity”, which means evacuation from terminals will come to a halt.
If the situation is repeated at ports across the country, it is inevitable that at some point in the near future CFS and private terminals will be unable to accept further import containers, which means the port container stacks will overflow impeding port operations, deterring shipping lines from calling.
Ports/terminals and CFSs have been declared as essential services and excluded from the lockdown restrictions and we are monitoring a number of local initiatives to encourage importers and agencies to start taking delivery of import loaded containers, but many stakeholders and service providers in the export-import containerised trade are either not functioning or only marginally.
We are monitoring the situation closely with our local partners and stand ready to divert or defer shipments as necessary. Contact us directly if you have any questions or concerns relating to this report.