Policy

Govt comes up with four-point plan to help exporters deal with Suez Canal blockage

Our Bureau New Delhi | Updated on March 26, 2021

The situation is temporary and is unlikely to have a long-lasting impact, say officials.

The Commerce Department has come up with a four-point plan to help exporters deal with the problems caused by Suez Canal blockage through a four-point plan that includes prioritising cargo, keeping freight rates in check and exploring the option of re-routing ships.

The plan was made in a meeting comprising senior officials from the Commerce Ministry (Logistics Division), Ministry of Ports, Shipping and Waterways, Container Shipping Lines Association (CSLA) and Federation of Indian Export Organisations (FIEO), per an official release of the Commerce & Industry Ministry.

“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 and work with the shipping lines for the same,” the release said.

A giant container ship is stuck across Egypt's Suez Canal, blocking passageway for other ships. The Suez Canal caters to an estimated 12 per cent of cargo that moves through waterways.

The CSLA has assured that the freight rates, as per existing contracts, will be honoured and 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, it added.

Exporters and officials fear that there may be some bunching taking place once the blockage is over, especially at JNPT, Mundra and Hazira’s ports. “Ministry of Ports, Shipping and Waterways assured that it will issue an advisory to these ports so as to gear up arrangements and ensure efficient handling during the forthcoming busy period,” the release said.

At the meeting, the SCLA advised shipping lines to explore the option of re-routing ships via the Cape of Good Hope and were informed that such re-routing usually takes 15 additional days’ time.

Published on March 26, 2021

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