Centre chalks out four-point plan to deal with Suez Canal blockage

The Centre has chalked out a four-point plan to deal with the situation arising from the blockage of Suez Canal. This plan, prepared by the logistics division of the commerce ministry, says prioritisation of cargo will be done in order to ensure timely movement of perishable cargo.

"FIEO (Federation of Indian Export Organisations), MPEDA (Marine Products Exports Development Authority) and APEDA (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," a commerce ministry statement said.

The CSLA (Cargo Intelligence Security and Logistics Associations) assured 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 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 JNPT, Mundra and Hazira. The 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.

Shipping lines were advised through the 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.

Blockage of the Suez Canal since March 23 is seriously hitting the global trade. This route is used for Indian exports or imports worth $200 billion to or 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.

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. As per the Centre, this backlog should take about a week's time to clear out.

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