Global container shipping lines such as Maersk Line, Mediterranean Shipping Company SA, CMA CGM SA, Hapag-Lloyd AG and COSCO Shipping Lines have started skipping India’s top container gateways: Jawaharlal Nehru Port Trust and Mundra port.
The shipping industry sees this as a clear indication that the problems in clearing import containers from the two ports and nearby container freight stations (CFS), and the lack of exports due to factory closures in the wake of the lockdown, have started to disrupt export-import (EXIM) trade and carrier schedules.
“Lines have started skipping JNPT and Mundra Port,” said the chief executive officer of a European container line. “Because there are no exports and imports, clearances are not happening,” he said.
“Lines cannot sail out with zero exports. It’s a cash loss to the lines as expenses are more than the revenue,” he added.
“Due to the significant reduction in demand, we will be having blank sailings (no shows) from West Asia/Indian subcontinent to Europe and Mediterranean (ME1,ME2 and ME3) and vice-versa,” said Maersk Line, the world’s biggest container carrier, in an April 3 customer advisory.
Maersk said its Mawingu service will also be omitting JNPT calls. Typically, in the container trade, services are run by a consortium of lines, with each partner calling the service by a different name.
Mediterranean Shipping Company has omitted JNPT calls on its India-Mediterranean (IMED) service, run jointly with CMA CGM and COSCO Shipping Lines. Other container services that have started to skip calls include the Europe, Pakistan, India Consortium 2 (EPIC 2) service run by CMA CGM; Hapag-Lloyd and COSCO Shipping lines linking JNPT and Mundra with Antwerp, Hamburg, Rotterdam, Le Havre and London. CMA-CGM calls it the EPIC 2 service whereas Hapag-Lloyd calls it the Indian Ocean Service (IOS).
JNPT coverage has been suspended by the Swahili Express operated by CMA CGM and Hapag-Lloyd on the India-Africa sector.
The West Asia-India Sub-continent-North America service run by CMA CGM and United Arab Shipping Company has started skipping calls at JNPT and Mundra, while the Nhava Sheva-Mundra-Gulf Service (NMG) and Arabian Sea Express service have also suspended JNPT and Mundra coverage.
“These skips are largely volume related, that too due to low export volume,” said an executive with a freight forwarding company based in Mumbai.
“Unless importers/consignees take delivery of their containers, problems will remain. But there is limited possibility to do so if factories are closed,” said the executive.
CFS operators that service JNPT and Mundra port have urged importers to evacuate containers quickly from the CFSs as “these are likely to get choked soon with a cascading impact on port congestion”.
“Exports, on the other hand, have been adversely affected due to the slowdown/ shut-down of factories owing to non-availability of labour. Ship owners are contemplating not to dock at Indian ports as post off-loading of import containers they have to sail out without export containers. This could also lead to an increase in freight rates for imports to cover up for their export leg cost,” Adarsh Hegde, Joint Managing Director, Allcargo Logistics Ltd, India’s top logistics firm, told last week.
To keep India from losing more market-share to China, the Federation of Indian Export Organisations (FIEO) is lobbying the Central and State governments, seeking permission to re-start factories with half the labour force.
Non-clearance of import containers from CFSs has also led to a huge imbalance in the availability of empty containers to support exports when they re-start.
To ease clearance of import containers, JNPT has waived dwell-time charges till April 14 for all import/export containers moved by road and rail (CFS/direct port delivery/empty/inland container depot) and shifting charges for change of mode (truck to rail or rail to truck) subject to receipt of NOC from shipping lines for change of mode.