The world is witnessing an unprecedented crisis, but it has brought an unprecedented focus on logistics and supply chain. The financial, societal and business disruption has seen demand drop across the board, including at ports, trucking and shipping industry, almost anywhere you look. World Trade Organisation has predicted the world trade to fall by up to 32 per cent this year. CRISIL has drastically cut the GDP growth forecast for India for 2021 fiscal to 3.5 per cent from the earlier 5.2 per cent. But shipping and logistics is the lifeline to global consumers and as per directives from the Ministry of Shipping, Government of India, the port sector has been declared as essential services, for maintaining of supply chain link within the country.
There are serious concerns regarding the overall earnings of Indian shipping companies in the first quarter of 2020. There has been a sharp drop in the dry bulk cargo movement since the third week of January 2020. Indian port operators are experiencing a drop in cargo volumes since February start and no one is certain about turnaround time. Cargo movement at ports has seen a sharp drop of around 60 per cent in the last few weeks because of a huge fall in industrial production in the country. Ports across India are operating at capacities less than 30 per cent. 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.
Amid a scarcity of workers, cargo cannot be unloaded from ships, and goods can’t be transported from ports to town due to a shortage of trucks. The CBIC has issued a directive for round-the-clock customs clearance at ports. Container shipping lines are idling vessels at a record pace, resulting in growing numbers of boxes being removed from trade network, as they go on cutting sailings on all major trade lanes.
Decline in evacuation at ports
At India’s busiest container gateway JNPT about 89,000 containers are lying at some 34 CFSs of which 9,000 containers have been granted out of charge by the Customs, but they are still not cleared due to lack of transport, factory closure or non-receipt of delivery order. According to traders the Mumbai-Pune Expressway – a major lifeline for movement of cargo is barricaded at Kalamboli.
For essential commodities like pharmaceuticals and agri products JNPT has created additional space because importers are not lifting material from CFSs. “The Customs department has notified ICDs belonging to CONCOR under the JNPT, giving the port more room to stack its containers. At JNPT, around $700 million of active pharmaceutical ingredients (API) and intermediates are blocked and another $300 million of finished goods are lying to be shipped.
Jawaharlal Nehru Customs House in Nhava Sheva declared ICD Mulund & ICD Tarapur as 'Extended Port Gate' of JNPT to help evacuate DPD boxes. Owned by Concor and Viraj Group respectively, the two ICDs are strategically located for importers in Mumbai and industries based in Gujarat. CONCOR shall also help in transshipping containers and supply rakes for moving containers en bloc by rail. CONCOR shall move the DPD/DPE containers from all terminals of JNPT to ICD Mulund for delivering to the Importer. The delivery shall be made to the importer at ICD Mulund only after Out of Charge (OOC) is given at JNCH. JNPT shall also coordinate with terminal operators in effectively utilizing the extended port gate. The Customs has also approved 43.27 hectares of land at JNPT as integrated centralized parking zone for loading and unloading of imported goods. Customs has advised CFSs to move OOC containers to empty yards or non-bonded areas for creating more space.
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