Despite many rounds of relaxations in movement, India’s shipping industry is facing a crisis


The large-scale exodus of migrant laborers has left cargo congesting ports and container freight stations, even as volumes of cargo processed at major ports including JNPT outside Mumbai in Maharashtra, and in Gujarat was seen to have dropped by 70 percent-80 percent.

Export-import traders caution the situation is likely to continue even until August if the government does not intervene to mobilise more workers. According to EXIM traders CNBC-TV18 spoke to, there is a severe shortage of labour, and drivers at ports, which has stalled movement of cargo from ports to container freight stations (CFSes), as only about 10 percent of the required strength of drivers is currently available.

The evacuation of CFSes is also facing unprecedented delays due to the unavailability of labour to load and unload cargo. In fact, ports in major metros, including the ones in Maharashtra and Gujarat are located in red districts, further making it difficult to mobilise labor in these areas.

In Unlock 1.0, signs of demand being lower have already emerged, according to Abhishek Gupta, All India Transporters’ Welfare Association (AITWA).

A large majority of workers employed at ports comes from the states of Bihar, Uttar Pradesh, West Bengal and Orissa, and have already returned to their native villages and cities, and are unlikely to return till there are clear signs of the virus abating or a stable direction from the government in terms of the timelines and extent of locking.

“Movement of rake has become almost impossible now. Trucks that would take 48 hours to be offloaded earlier are taking 9 days now. We’re seeing cargo isn’t being stuffed on time because of the shortage of labour at ports. From the yard to the port, that is from the first point to the last, there is a shortage”, Rishi Agrawal, Rika told CNBC-TV18.

Agrawal’s company is an exporter of agro-commodities such as sugar, which have seasonal demand cycles and suffer from increased transit times.

“India’s competitive advantage was it could ship orders within a week or 10 days. We are now seeing business move to Brazil and Western Africa, as Brazil has already started to open up”, he said.

The impact of these delays and shortages have significantly pushed up costs for EXIM traders. While they’re paying up to 50 percent higher for transport costs, they’re also shelling out money towards hefty penalties, detention and demurrages at ports.

“EXIM traders are paying detention and demurrages to the extent of $150 and per day at ports”, Ashok Goyal, BLR Logistiks told CNBC-TV18.

Traders are also paying heavy penalties on uncleared air cargo, which has not seen government intervention since the month of April.

In another instance, automakers too are paying up to 80 percent higher rates to transport companies to move export shipments.
Maharashtra particularly has got the shortest end of the stick. Sources say many transporters are unwilling to deploy trucks along JNPT due to the unpredictable waiting times, even as rail and bus services continue to add to the labour exodus.
Source: CNBC





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