Severe congestion at Sri Lanka’s Colombo port is making life more difficult for Indian shippers already badly bruised by tightening vessel space and skyrocketing freight rates under the crippling effects of the COVID-19 crisis.
Colombo commands the bulk of India’s transshipped volume, especially for trade in and out of the country’s east coast corridor with fewer direct long-haul sailings.
While warning shippers to anticipate further delays and disruptions to their cargo, major carriers noted an acute labor shortage following the enforcement of fresh community lockdowns intended to contain surging COVID-19 infections, combined with wage contract disputes plaguing one of the Colombo terminals, has led to current excessive slowdowns at the harbor.
“Due to the pandemic situation in Colombo, the local government has clamped a partial lockdown that has curbed staff commuting to work,” Mediterranean Shipping Co. said in a customer advisory. “In view of the low turnout of staff to work, Colombo terminals are being faced with severe labor shortage.” It said the operational crunch is creating significant vessel backups at the port.
Other liners active in Indian trades also put out similar notices. “Currently, there are berthing delays, sailing delays, and ITT (inter-terminal transfer) delays experienced at the Colombo port,” Maersk said. “However, our teams are working closely with the terminals in order to minimize the customer impact.”
CMA CGM said sailings under its NEMO and Colombo JAX routings — offering weekly calls at Colombo — have been affected.
Besides sending regional transshipment movement into a tailspin, mounting Colombo delays have already had ripple effects for vessel schedule reliability at some Indian ports. “We had many vessels delayed at Cochin due to the disruption in Colombo,” an official at the southern Indian port told.
‘Triple whammy’ for shippers
Digital freight forwarder Shipwaves COO Sajid Mohammed told, when equipment availability is so low and rate levels are shooting up, the Colombo congestion occurring just ahead of the holiday season is a “triple whammy” for Indian shippers. He said cargo interests could face up to a four-week delay in this worsening scenario. “We have been assisting customers in finding options to reroute their cargo,” he said. “But sometimes, if that [effort] is proving difficult, they will have no option but to manage with the delay.”
Daniel Krassenstein, global supply chain director of US-based industrial packaging manufacturer Procon Pacific, echoed those concerns, noting the company has several shipments out of India’s east coast locations already held up because of the Colombo congestion quagmire.
“Our suppliers in Kolkata, Bangalore, and Chennai have done an excellent job of improving their production schedules despite the COVID-19 challenges,” he told. “However, we deal with the ‘total transit time,’ so if Colombo becomes a less reliable transshipment hub, then we will need to seek alternative solutions, including over-the-road (hauling) to Nhava Sheva (JNPT), at a greater expense.”
But whether or not there will be enough carrier loading capacity to handle those diversions with minimal delays remains to be seen as booking cancellations and cargo rollovers amid an upsurge in exports are no less a problem at India’s busier west coast ports, including Mundra.
Source: Journal of Commerce