Govt Chalks Out Four-Point Plan To Deal With Blockage Of Suez Canal

Govt Chalks Out Four-Point Plan To Deal With Blockage Of Suez Canal

by Swarajya Staff - Saturday, March 27, 2021 08:18 AM IST
Govt Chalks Out Four-Point Plan To Deal With Blockage Of Suez CanalA Container ship stuck sideways has blocked the traffic at Suez Canal (Pic Via Twitter)

A four-point plan has been chalked out to deal with the situation arising from the blockage of Suez Canal, the Commerce Ministry said on Friday (26 March).

The plan was chalked out in a meeting convened by the Commerce Ministry's Logistics Division.

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), the ministry said in a statement on Friday (26 March).

According to the ministry, the blockage of Suez Canal since 23 March is seriously hitting the global trade. This route is used for Indian exports,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, etc.

The plan chalked out at the meeting to deal with blockade includes:

  1. Prioritisation of cargo: FIEO, MPEDA and APEDA will jointly identify cargo particularly perishable cargo for priority movement and work with the shipping lines for the same.

  2. Freight Rates: 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.

  3. Advisory to Ports: 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.

  4. Re-routing decisions: 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.

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, tugboats, etc. to straighten the stuck vessel), the total backlog created would be about 350 vessels, the ministry said.

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 added.

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