Hindustan Times (Lucknow)

Shortage of workers, choked ports disrupt supply chains

- Anisha Dutta anisha.dutta@hindustant­imes.com ■

NEWDELHI:At least 50,000 shipping containers have been lying orphaned at container freight stations and private container terminals at three large ports in Tamil Nadu with no trucks available to transport them.

Most Indian ports have declared a so-called force majeure -- declared when unpreceden­ted events overtake them and prevent them from doing their job.

At ports across India, cargo terminals are operating at capacities less than 30%. On April 3, in a video conference with Union minister of shipping Mansukh Mandaviya, port operators, importers, and shipping companies raised some of these issues, including the unavailabi­lity of trucks (and drivers), the shortage of workers in ports and cargo terminals, and choked ports .

The 21-day lockdown enforced by India on March 25 -- it ends midnight April 14; the Prime Minister is to address the nation on Tuesday morning on whether it will be extended and if so, fully or in part -- has hit the handling of cargo across Indian ports, choking shipping lines.

There has been a shortage of workers to handle cargo and a dearth of truck drivers to ferry the cargo to factories leading to a huge inventory pile up at ports. The Centre’s move to waive demurrage charges during the lockdown is acting as a disincenti­ve for importers to figure out ways to move cargo.

The closure of factories has also left cargo grounded. India’s 7,516.6 km long coastline caters to more than 90% of India’s trading by volume. The statistics are worrying because a snag in the supply chain could stoke distress.

Cargo volumes at the Indian ports were already witnessing some slowdown in FY2020 on the back of various factors such as the US-China trade war and the ongoing economic slowdown, according to credit rating agency ICRA. Bottleneck­s in the shipping and logistics part of the sup

chain, which are critical for timely movement and evacuation from ports, could be an aggravatin­g factor, the firm noted.

Manufactur­ers whose companies aren’t producing anything “aren’t taking deliveries” of imports, said FIEO director general Ajay Sahai. The Federation of Indian Export Organisati­ons is India’s apex export promotion body.

“The ports are choking with imports. There is no place to put the containers. There is no unloading happening at factories. The entire import and export trade is a chain activity and even if one link is missing, the entire chain gets disrupted,” he added.

Sahai listed the problems: courier companies that are not working during the lockdown; factories that are unoperatio­nal; customs and ports that are working but a fraction of capacity. “You can’t force people to come to work. Supply chain disruption will continue once factories start even in limited way,” Sahai said.

In a letter to the home ministry on Sunday, the commerce ministrypr­oposedallo­wingcompan­ies operating large factories making textiles, automobile­s, electronic­s, cement, and fertiliser­s to restart operations with proper sanitation and distancing norms in place. It suggested restrictin­g their capacities to 20-25% in a single shift to start with.

“Commerce ministry has sent the government recommenda­tion on allowing certain industries. The industry also does not have liquidity to pay for duties. The key is to allow some activity, then ease liquidity. At present there are no incentives to clear the consignmen­t,” Sahai said.

Earlier this month, the ministry advised major ports to invoke force majeure. This means, for existing and operationa­l projects, the Major Ports can permit waiver of all penal consequenc­es on a case-to-case basis along with deferment of certain performanc­e obligation­s under the relevant provisions of a concession agreement.

The Centre has issued several orders to states asking them to allow movement of all transport vehicles. Tens of thousands of trucks have been left stranded across state borders since the lockdown took effect on March 25. The government has issued several advisories to state chief secretarie­s that movement of both essentiala­ndnon-essentialg­oods be allowed, seeking to avoid shortages. To address the snag, ports are also encouragin­g transporta­tion of goods by railways.

“As of now we are operating at 70% of our capacity... We are hoping it will get better slowly as factories are allowed to open. There is substantia­l movement happening through rail right now ,” said Kolkata Port Trust (KoPT) chairman Vinit Kumar.

 ?? SAMIR JANA /HT PHOTO ?? ■
Goods trucks at a parking bay in Kolkata on April 4.
SAMIR JANA /HT PHOTO ■ Goods trucks at a parking bay in Kolkata on April 4.

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