New Delhi: The Centre has chalked out a four-point plan to deal with the situation arising from the blockage of the Suez Canal including advising ships to re-route via Cape of Good Hope.
This plan was chalked out in a meeting convened by the Logistics Division, Department of Commerce, Government of India Friday. It includes prioritisation of cargo, freight rates, advisory to ports and re-routing of ships.
A 193-km canal, which is an artificial sea-level waterway in Egypt, connects the Mediterranean Sea to the Red Sea and provides the shortest sea link between Asia and Europe. The 224,000-tonne container ship was grounded in the Suez Canal on Tuesday morning, completely blocking the traffic along the waterway and delaying a number of ships carrying cargo ranging from oil to consumer goods.
Global trade impacted
Blockage of the Suez Canal is seriously hitting the global trade, the Ministry of Commerce and Industry said in a statement.
This route is used for Indian exports/imports worth USD 200 billion to/from North America, South America and Europe. It includes petroleum goods, organic chemicals, iron and steel, automobile, machinery, textiles and carpets, handicrafts including furniture, leather goods, etc.
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).
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, according to the statement.
“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, tugboats, etc. 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 time to clear out. It was decided in the meeting to closely monitor the situation,” the statement read.
Under the prioritisation of cargo, it was decided that FIEO, MPEDA and APEDA will jointly identify cargo particularly perishable cargo for priority movement and work with the shipping lines for the same.
The CSLA 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,” the statement read.
Once the blockage is over, it is expected that some bunching may take place, especially at the ports of JNPT, Mundra and Hazira, it said.
“Ministry of ports, shipping and waterways assured to issue an advisory to these ports so as to gear up arrangements and ensure efficient handling during the forthcoming busy period,” the statement said.
Besides, shipping lines were 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.