Labor scarcity at warehouses compounds Indian port flow woes

Labor scarcity at warehouses compounds Indian port flow woes

A shortage of labor is the latest challenge thrown at Indian shippers as they try to clear a backlog of containers built up amid the country’s COVID-19 lockdown. Photo credit: PSA India.

As Indian port-terminal stakeholders attempt to relieve the stockpile of containers amassed following the enforcement of a country-wide COVID-19 lockdown now extended to May 31, beneficial cargo owners (BCOs) are facing a new challenge: an acute shortage of labor engaged in cargo clearance activities.

An advisory this week from the Container Freight Stations Association of India (CFSAI) warning BCOs of delays in the processing of their delivery demands reflects that concern. The CFSAI represents near-dock container freight station (CFS) operators across Indian ports.

Amid rising virus fears and lockdown-driven economic difficulties, domestic migrant workers employed at key port locations have been heading back to their home provinces, mostly in the country’s northeastern states, thus severely hampering maritime trade.

“A very large number of migrant labor, including truck drivers and labor from JNPT [Jawaharlal Nehru Port Trust], Mundra, Surat, and other industrial and port hubs have begun a mass exodus to their hometowns in the last six to seven days,” the CFSAI said. “Despite all-out efforts by our members to retain them by offering additional remuneration and facilities, they are practically unstoppable and not willing to stay back at any cost.”

The inland logistics group said notwithstanding considerable operational issues, compounded by restrictions imposed by local authorities, CFSs have cleared approximately 168,000 TEU out of JNPT and 59,000 TEU out of Mundra Port since the lockdown began on March 24, with daily outward moves averaging 4,000 TEU and 1,400 TEU, respectively, in the past three weeks.

The CFSAI also noted while CFSs continue to put in all possible efforts to handle delivery requests, labor scarcity and other factors beyond members’ control could prevent them from meeting shipper expectations, hinting at circumstances akin to force majeure.

At the same time, a preceding CFSAI advisory — offering a 50 percent waiver on storage charges for containers gated in during April 1-15 and cleared by May 20 — met with pushback from shipper representative groups.

Seeking demurrage relief

The Brihanmumbai Custom Brokers Association (BCBA), whose members typically handle customs services for BCOs, questioned the usefulness of such a restricted waiver policy, adding it would have no material impact on the pace of clearance as the lockdown measures persist.

“We feel it is unfair to expect around 70,000 plus containers, which are currently waiting at CFSs, to be cleared in the next few days,” the BCBA said. “Even though our services were categorized as essential services, the factories of non-essential goods were not permitted to operate by the government and local authorities. Thus, many of the importers and exporters could not clear their consignments.”

The BCBA has also sought demurrage relief for cargo owners who had already secured the release of cargo after paying full storage charges, which it said was extremely helpful in minimizing inventory levels. That push comes on the heels of container lines liberalizing their detention policies in line with the government directive, despite the skepticism of some carriers who have been wary of the commercial impact that idling equipment would cause.

“We believe that extended blanket waivers on detention were counter-productive, as they build up increasingly more pressure on the infrastructure. Instead, we decided to offer our customers free time over and above the initial free time that was already offered, and heavily discounted our detention tariffs temporarily to a fraction,” Steve Felder, Maersk’s managing director for South Asia, told JOC.com. “Through this move, our intention was to provide our customers with an incentive to clear their cargo and reduce the pressure on the infrastructure. This has been welcomed by the overwhelming majority of consignees, and we have seen a sizeable increase of over 50 percent in clearance of cargo.”

Either way, with most large Indian factories remaining shut or operating at much lower capacity, along with disputes surrounding cargo penalty claims, there is no guarantee uncleared containers will be picked up, emptied, and redelivered in a timely fashion.

India’s total exports during April plunged 60 percent year over year, reportedly the steepest monthly fall by value in over 25 years, new government data showed. India’s containerized exports out of major public ports more than halved last month to some 168,000 TEU, while minor private ports saw last month's combined tonnage fall 24 percent year over year, according to a JOC.com analysis.

Bency Mathew can be contacted at bencyvmathew@gmail.com.