Containers pile up at Indian docks amid COVID-19 lockdown
Date: Friday, March 27, 2020
Source: Journal of Commerce
With Indian ports facing serious inland service shortages amid a 21-day countrywide lockdown that began Wednesday, exporters and importers are scrambling to move cargo in and out of terminals across the country.
“We have 60 import containers under the direct port delivery [DPD] scheme stranded at Jawaharlal Nehru Port Trust [JNPT],” a leading newsprint importer told JOC.com. “We are having a hard time securing delivery orders from the carrier and once that’s done, the bigger challenge will be to move these boxes to our factory site.”
DPD is a fast-track program for the clearance of imports.
“We are concerned about potential detention charges, although there are talks about some extended free time,” the official said.
The Mumbai-based shipper’s plight is not an isolated case, as JNPT, which handles the majority of Indian containerized freight, has been hit hard by severe truck driver scarcity and drayage capacity issues. “Terminals at JNPT are operating at about 30 percent of capacity because of a sharp drop in gate-in and-gate-out activity,” a terminal official told JOC.com.
“The movement of [export-import] containers by road has virtually come to a standstill,” 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. In order to fill the road transportation gap until total normalcy is restored, authorities have been successful in convincing train operators to immediately put into service two to three trains each on a daily basis.”
The public port is also facing pressure from dockworker unions to temporarily close terminal operations over their increasing concerns about potential virus transmission to the labor community. “We are taking sufficient precautions by providing them personal protective appliances, but those may not be sufficient to control the wide spread of infection,” a labor source said.
Deteriorating port conditions
The enforcement of force majeure by the Adani Group at its flagship Mundra Port and other smaller locations in the Gujarat State points to worsening port working conditions as the national lockdown and inter-state border closings sent supply chains into a tailspin.
The Brihanmumbai Custom Brokers Association (BCBA), in a letter to government authorities, highlighted that members are facing serious difficulties finding trucks due to the lockdown and restrictive measures on public movement. “The association has been getting a lot of communications from members pertaining to clearance of import and export goods,” the BCBA said. “While the endeavor of all custom brokers is to ensure that custom clearance does take place, staff are unable to reach various work places.”
Trade groups are also reporting similar hardship at other port locations. The BCBA’s counterpart at the Cochin Port has even made a call to suspend all port activities until the end of the month. “Considering the prevailing situation and the fast spread of coronavirus cases, it is not possible for customs brokers to undertake clearance activity at the port terminal and port CFSs [container freight stations],” the Cochin Customs Brokers’ Association said. The Cochin harbor hosts DP World’s Vallarpadam Terminal, touted as the country’s first transshipment gateway.
The Container Shipping Lines Association (CSLA), representing foreign carriers in India, has also approached government authorities for immediate intervention.
But for beleaguered cargo owners, the situation is no different at the country’s southern locations, such as Chennai and Tuticorin, sources said.
Notwithstanding mounting challenges, including the declaration of force majeure at some ports, Maersk said it is not considering canceling any Indian calls at present.
“We are trying our best to maintain business as usual,” a Maersk (India) official told JOC.com. “Of course, the situation is fluid, so there are constant changes taking place.” Maersk provides regular calls at all key Indian ports, including three weekly calls at Mundra and one at Hazira, which have already enforced force majeure.
However, in a separate trade notice, the carrier cautioned customers to expect some service delays around the movement of containers in and out of terminals, the issuing of delivery orders, and transshipment bookings.
“Our offices throughout India remain operational with all staff working remotely from the safety of their own home with adequate [information technology] infrastructure to avoid any disruptions,” Maersk said. “We are constantly monitoring the volatile environment and adjusting our approach to ensure we can continue to keep cargo moving.”
Meanwhile, force majeure — which typically comes into effect when unforeseeable events or circumstances prevent one party from meeting contractual obligations — has been extended to all private ports governed by the Gujarat Maritime Board (GMB). The group encompasses APM Terminals Pipavav as well.
“We are closely monitoring the local situation and committed to ensuring safe operations whilst working towards mitigating any possible impact,” Jakob Friis Sorensen, managing director of APMT Pipavav, said in a statement to JOC.com. “We are working persistently to support our customers’ supply chains with minimum disruptions.”