India's ports are 'free warehousing' as imports eat into export space
THE Container Shipping Lines Association of India (CSLA) says tens of thousands of uncleared import containers are clogging supply chains amid India's coronavirus lockdown
25 May 2020 - 19:00
CSLA executive director Sunil Vaswani said many shipping lines had granted extra free time for container storage, despite most privately operated terminals not offering corresponding respite on port ground rent.
'[It] has proved counter-productive, with most importers and consignees using the containers as free warehousing as the factories are shut,' said Mr Vaswani in a report by UK's The Loadstar.
He said the resulting congestion was also detrimental to the country's exports, as there is very little space left at ports, CFSs and inland container depots to handle export volumes.
Mr Vaswani said only 26,000 TEU has been cleared from container freight stations (CFSs) near Mumbai's Jawaharlal Nehru port, leaving 100,000 TEU lying uncollected.
'Similarly, about 50,000 TEU is lying uncleared at Chennai,' he was quoted as saying. 'And other ports, like Hazira for instance, are completely congested and have been forced to close their gates to imports and exports.'
Carriers' equipment is also being blocked by the uncleared cargo, Mr Vaswani added, leaving few available boxes for exports, which have shrunk by 90 per cent due to the factory closures and inland supply chain bottlenecks.
'Lines continue to service the trade, but the vessels essentially call just to discharge import loads and then sail out light, in view of negligible export loads,' he noted. As a result, he said, carriers' costs per unit were increasing, forcing them to blank sailings and add to their financial losses.
'Ships remain idle at a huge cost,' said Mr Vaswani. 'Active consideration therefore needs to be given by the government and terminal operators towards the reduction in vessel-related costs by at least 25 per cent immediately, to encourage lines to maintain service levels during the current critical period.'
The congestion has also prompted concerns by some freight forwarders that India's logistics sector will appear 'unreliable' during a time of crisis.
Global Logistics Solutions India director Naveen Prakash said: 'The fact remains there are not many truck drivers and very stringent conditions on running factories, which is a great recipe for port congestion.'
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