India employs steps to ease cargo movements during lockdown

Author: Priya Jestin

2020/03/30

MUMBAI (ICIS)--The Indian government has asked shipping companies to desist from imposing container detention charges on all shipments, while it now allows transportation of all goods based on newly released guidelines on the implementation of the country’s 21-day lockdown amid the coronavirus pandemic.

But most firms are facing massive manpower shortage due to the lockdown, and this will also pose problems in loading/unloading of goods given its labour-intensive nature.

Trucks on the road have also been significantly reduced, while ancillary services such as repair shops and eateries along the routes have been shut down.

"In order to maintain proper supply lines at the Indian seaports the shipping lines are advised not to impose any container detainment charge on import and export shipments for the period from March 22, 2020 to April 14, 2020 (both days inclusive)," India’s Directorate General of Shipping said on Sunday.

Detention charges refers to fees imposed on importers and exporters for use of containers outside of the terminal or depot beyond the free time arrangement under contract, which is usually between three to 10 days excluding Sundays and non-working days. The charges vary depending on the size and type of the cargo.

Containers are either owned or are leased by shipping lines for their customers (shippers or merchants) for the safe and fast door-to-door transport of their goods.

“This decision is purely [a] one-time measure to deal with present disruptions caused by the Covid-19 [coronavirus disease] outbreak," the statement said, adding that during this period, shipping lines were also advised not to impose any new or additional charges.

India’s total coronavirus infections as of 29 March stood at 979, with 25 deaths, according to data from the World Health Organisation (WHO).

“The advisory will help in smooth functioning of trade and maintenance of supply chain in the country," it said.

Global container shipping company Maersk Line announced waiver of container detention charges on all its import shipments into India up to 7 April, according to news agency the Hindu BusinessLine.

TRANSPORTATION OF ALL GOODS ALLOWED
To smoothen operations during the 21-day lockdown from 25 March, the government will allow transportation of all goods without distinction of essential and non-essential items.

Exporters would be allowed to ship their goods without the mandatory certificate of origin, according to the Ministry of Commerce, to help clear backlog of goods which could not be shipped out due to lack of requisite documents.

“These certificates will be issued retrospectively by concerned Indian agencies after they open their offices,” it said in a statement.

Importers would also be allowed to take in goods without certificate of origin from its free trade agreement (FTA) partner countries, the commerce ministry said.

Fertiliser firms are also expected to benefit from the government’s recent decision to exempt all activities involved in the manufacture and packaging of fertilizers from its lockdown order.

“Indian Farmers Fertilizer Cooperative (IFFCO) welcomes the decision by the government of India for allowing the functioning of fertiliser units,” group managing director U S Awasthi said in a Twitter post.

While the manufacture of fertilizers has been categorized under essential commodities, companies were finding it difficult to transport and offload goods due to shortage of labour.

“Interstate movement of trucks is also a major bottleneck. However, we are trying to get support from local administrations,” said a source at a Mumbai-based fertilizer firm.

This decision by the government is timely as the next cropping season is expected to begin in the next couple of months, he added.

The recent directive from the government has exempted markets, procurement agencies as well as intra- and inter-state movement of farm-related goods and implements.

REFINERIES, PLASTIC PACKAGING PLANTS RUN AT REDUCED RATES
The 21-day lockdown in India, which was announced on 25 March, has initially allowed for the production and supply of essential commodities only.

The move prompted several industries to shut operations and some ports in the country to declare force majeure.

Most Indian refiners have cut production and stopped operations at crackers and petrochemical facilities following the countrywide lockdown.

Indian Oil Corp (IOC) has cut crude processing at its refineries by over 30% as local demand for refined fuel has been hit.

“In the wake of the COVID-19 outbreak in the country, the demand for petroleum products like petrol, diesel, fuel oil, bitumen, etc, have reduced substantially,” it said.

Unavailability of manpower to load cargoes on to trucks and unload them at processor units prompted producers to suspend all dispatches in the country.

Plastic converters and plastic packaging producers have also reduced or partially shut down operations due to lack of manpower.

“We are finding it difficult to get raw material for production and also send out our finished products,” said a source from Mumbai-based producer of biaxially oriented polyethylene terephthalate (BOPET).

“While the government has declared that movement of goods will not be hampered, it has not yet percolated down to the local levels,” the source said.

India’s Ministry of Shipping in a notice last week has allowed ports to declare force majeure due to the lockdown.

Private ports have mostly made the declaration, including Adani, which runs 10 ports, namely: Dhamra, Hazira, Tuna, Dahej, Mundra, Kattupalli, Vizhinjam, Visakhapatnam, Ennore and Mormugao, according to newswire Bloomberg.

The ports of Krishnapatnam port, Gopalpur, Karaikal and Gangavaram have also declared force majeure, Bloomberg reported.

Gateway Terminals India, which is the biggest container terminal by volume in the country, declared a force majeure on 27 March. It operates the container terminal at the Jawarharlal Nehru Port (JNPT) near Mumbai, according to the Hindu BusinessLine.

Focus article by Priya Jestin

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