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Covid-19 impact: Port congestion adds to exporters’ woes


Date: 22-04-2020
Subject: Covid-19 impact: Port congestion adds to exporters’ woes
New Delhi: Import containers have piled up at ports as manufacturing of non-essential goods is yet pick up under the lockdown, prompting some ports to shut export gates.

India’s exports shrank almost 35% in March, the biggest contraction in almost a decade, reflecting the global slowdown made worse by the Covid-19 pandemic.

Exporters looking to restart operations are confronted with multiple issues including additional costs due to stringent norms, cash flows and getting labour back to work.

Shipping lines are skipping Indian ports due to lack of yard space is the concern that Indian exporters and importers have begun facing as trade opens up. JNPT is preparing a contingency plan to clear congestion.

While there was a marginal increase of 50 more special economic zones (SEZ) becoming operational on Monday, with another 50 starting work from home, the numbers vary among states, exporters said higher compliance cost associated with bringing and maintaining labour are hindrances in restarting factories.

“We will watch the situation for one week,” said one official.

Exporters have already flagged these issues with the government as they sought a lump sum amount, especially for the small units to be able to meet new compliance costs.

“Owners need to give a guarantee that the labour is not coming from any containment zone. There is also a fear in the employers that even if there is one positive case, they would be held liable,” said Ravi Sehgal, chairman EEPC.

“Ports have their own problems. Many inbound containers are lying at ports whose delivery is not happening and that is another crisis for exports,” said Ajay Sahai, director general, Federation of Indian Export Organisations.

JNPT, which handles around 8,000 containers of which 2,000 are reefer containers, is preparing a contingency approach in case of congestion.

“We have a contingency approach and don’t need to send the consignments to other ports,” said Sanjay Sethi, chairman, JNPT, adding that the port is prepared for the worst case scenario when no evacuation of consignments happens for two months.

While temperature-sensitive cargo such as food and pharmaceuticals are fast moving, exporters have complained that exports are getting adversely impacted since raw materials are lying at ports.

JNPT expects around 67 vessels to come by April 30 and there is no skip in that, sources said. Almost 90-92% of the imports that happened this time last year, are happening at the port in the last 4-5 days.

Source:- economictimes.indiatimes.com

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