India’s shipping industry in troubled waters even after rounds of govt relaxations

shipping industry

The Indian shipping industry faces crisis of labour as dearth of migrant labourers has led to cargo congestion at 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.

There has been mounting tension with respect to the situation aggravating.

Export-import traders have already warned that the situation will likely continue even until August if the government does not steps in to mobilise more workers.

Cargo movement from ports to container freight stations has come to a standstill due to a severe shortage of labour and drivers at ports, as only about 10 percent of the required strength of drivers is currently available.

This has also led to prolonged delays with respect to evacuation of CFSes.

Another factor that has led to a difficulty in mobilizing labour is the fact that ports in major metros come in the red districts.

Due to the coronavirus pandemic, there was a large scale exodus of migrant workers to their homes in Bihar, Uttar Pradesh, West Bengal and Orissa, who are unlikely to return unless the virus clears soon.

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

“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 from Rika Shipping said.

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 delays and shortages have significantly escalated costs for EXIM traders.

Apart from paying 50 percent higher for transport costs, they are also paying hefty amounts towards hefty penalties, detention and demurrages at ports.

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