Suez Canal blockade: Exporters' bodies to identify cargo for priority movement

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SME Times News Bureau | 27 Mar, 2021
As efforts are underway to free a giant container ship stuck in the Suez Canal, the Indian government in discussion with the stakeholders has decided that the Federation of Indian Export Organisations (FIEO), Marine Products Export Development Authority (MPEDA) and Agricultural and Processed Food Products Export Development Authority (APEDA) will jointly identify cargo, particularly perishable cargo, for priority movement.

The exporters' bodies will also work with the shipping lines for the priority movement.

The government has come up with a four-point plan to deal with the situation arising from the blockage of Suez Canal. The plan was chalked out in a meeting convened by the Logistics Division, Department of Commerce, Government of India on Friday.

The meeting was chaired by Pawan Agarwal, Special Secretary (Logistics) and attended by the Ministry of Ports, Shipping and Waterways, ADG Shipping, Container Shipping Lines Association (CSLA) and Federation of Indian Export Organisations (FIEO).

Apart from the prioritisation of cargo, the plan outlined that shipping lines have been advised through CSLA to explore the option of re-routing of ships via the Cape of Good Hope. It was pointed that such re-routing usually takes 15 additional days' time.

CSLA also assured that the freight rates as per existing contracts will be honoured. A request has been made to the shipping lines to maintain stability in freight rates during the period of this crisis. It was noted that the situation is temporary and is unlikely to have a long-lasting impact, said an official statement.

"Once the blockage is over, it is expected that some bunching may take place, especially at the ports of JNPT, Mundra and Hazira. Ministry of Ports, Shipping and waterway assured to issue an advisory to these ports so as to gear up arrangements and ensure efficient handling during the forthcoming busy period," it said.

The Commerce Ministry statement noted that the blockage of Suez Canal since March 23 is seriously hitting the global trade.

This route is used for Indian exports or imports worth $ 200 billion to and from North America, South America and Europe. It includes petroleum goods, organic chemicals, iron & steel, automobile, machinery, textiles and carpets, handicrafts including furniture, leather goods among others.

It was noted in the meeting that over 200 vessels are waiting on the North and South sides of the Suez Canal and about 60 vessels are getting added to the queue on a daily basis.

If two more days are taken before the efforts result in clearance of the canal (digging on both sides, extra barges being added on every high tide and tugboats to straighten the stuck vessel), the total backlog created would be about 350 vessels. It is estimated that this backlog should take about a week's time to clear out. It was decided in the meeting to closely monitor the situation, it said.