India chalks out 4-point plan to deal with blockage of Suez Canal

India’s department of commerce has chalked out a four-point plan to deal with the situation arising out of the blockage of the Suez Canal. The plan includes prioritisation of cargo, freight rates, advisory to ports and re-routing decisions. Over 200 vessels are waiting on the north and south of the canal and about 60 are getting added to the queue daily.

The plan was chalked out at a meeting convened chaired by Pawan Agarwal, special secretary (logistics) in the ministry and attended by representatives from the ministry of ports, shipping and waterways, the Container Shipping Lines Association (CSLA) and the Federation of Indian Export Organisations (FIEO), and the additional director general of shipping.

The Suez Canal, one of the world’s busiest waterways, continued to remain blocked for the sixth day on March 28 as a giant container ship is stuck sideways in it hindering global shipping and trade.

FIEO, the Marine Products Export Development Authority (MPEDA) and the 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, according to an official release.

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 this crisis period. The situation is temporary and is unlikely to have a long-lasting impact.

Once the blockage is over, it is expected that some bunching may take place, especially at the ports of Mumbai, Mundra and Hazira. An advisory will be issued to these ports to gear up arrangements and ensure efficient handling during the forthcoming busy period.

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.

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