news

June 16th, 2023

01 Multiple ports in India have halted operations due to a hurricane

Due to the severe tropical storm “Biparjoy” moving towards the northwestern corridor of India, all coastal ports in the state of Gujarat have ceased operations until further notice. The affected ports include some of the country’s major container terminals such as the bustling Mundra Port, Pipavav Port, and Hazira Port.

A local industry insider noted, “Mundra Port has suspended vessel berthing and plans to relocate all berthed vessels for evacuation.” Based on current indications, the storm is expected to make landfall in the region on Thursday.

Mundra Port, owned by the Adani Group, a multinational conglomerate based in India, is particularly crucial for India’s container trade. With its infrastructure advantages and strategic location, it has become a popular primary service port of call.

All berthed vessels have been shifted away from the docks throughout the port, and authorities have been instructed to halt any further vessel movement and ensure immediate safety of port equipment.

Adani Ports stated, “All existing vessels anchored will be sent to the open sea. No vessel shall be allowed to berth or drift within the vicinity of Mundra Port until further instructions.”

The hurricane, with estimated wind speeds of 145 kilometers per hour, is classified as a “very severe storm,” and its impact is expected to last for approximately a week, causing significant concerns for authorities and stakeholders in the trading community.

Ajay Kumar, Head of Shipping Operations at Pipavav Port’s APM Terminal, mentioned, “The ongoing high tide has made maritime and terminal operations extremely challenging and difficult.”

The port authority stated, “Except for container vessels, the activities of other vessels will continue to be guided and boarded by tugboats until weather conditions allow.” Mundra Port and Navlakhi Port collectively handle around 65% of India’s container trade.

Last month, strong winds caused power outages, forcing the closure of operations at Pipavav APMT, which declared force majeure. This has created a bottleneck in the supply chain for this busy trading region. As a result, a significant volume of cargo has been redirected to Mundra, posing considerable risks to the reliability of carriers’ services.

Maersk has alerted customers that there may be delays in railway transportation due to congestion and train blockages at the Mundra rail yard.

The disruption caused by the hurricane will exacerbate cargo delays. APMT stated in a recent customer advisory, “All maritime and terminal operations at Pipavav Port have been suspended since June 10, and land-based operations were immediately halted as well.”

Other ports in the region, such as Kandla Port, Tuna Tekra Port, and Vadinar Port, have also implemented preventive measures related to the hurricane.

02 India’s ports are experiencing rapid growth and development

India is the world’s fastest-growing major economy, and it is witnessing an increasing number of large container vessels calling at its ports, making it necessary to construct larger ports.

The International Monetary Fund (IMF) predicts that India’s Gross Domestic Product (GDP) will grow by 6.8% this year, and its exports are also rapidly increasing. India’s exports last year amounted to $420 billion, surpassing the government’s target of $400 billion.

In 2022, the share of machinery and electrical goods in India’s exports exceeded that of traditional sectors like textiles and garments, accounting for 9.9% and 9.7% respectively.

A recent report by Container xChange, an online container booking platform, stated, “The global supply chain is committed to diversifying away from China, and India seems to be one of the more resilient alternatives.”

As India’s economy continues to grow and its export sector expands, the development of larger ports and improved maritime infrastructure becomes essential to accommodate the increasing trade volume and meet the demands of international shipping.

Global shipping companies are indeed allocating more resources and personnel to India. For instance, German company Hapag-Lloyd recently acquired J M Baxi Ports & Logistics, a leading private port and inland logistics services provider in India.

Christian Roeloffs, CEO of Container xChange, stated, “India has unique advantages and has the potential to naturally evolve into a transshipment hub. With the right investments and focused attention, the country can position itself as a significant node in the global supply chain.”

Earlier, MSC introduced a new Asia service called Shikra, connecting major ports in China and India. The Shikra service, operated solely by MSC, takes its name from a small raptor species found in Southeast Asia and most parts of India.

These developments reflect the increasing recognition of India’s importance in global trade and supply chain dynamics. As India’s economy continues to thrive, investments in ports, logistics, and transportation infrastructure will further strengthen its position as a crucial player in international shipping and trade.

Indeed, Indian ports have faced several challenges this year. In March, it was reported by The Loadstar and Logistics Insider that the closure of a berth operated by APM Terminals Mumbai (also known as Gateway Terminals India) led to a significant reduction in capacity, resulting in severe congestion at Nhava Sheva Port (JNPT), India’s largest container port.

Some carriers opted to discharge containers intended for Nhava Sheva Port at other ports, primarily Mundra Port, which caused foreseeable costs and other consequences for importers.

Furthermore, in June, a train derailment occurred in Kolkata, the capital of West Bengal, resulting in a violent collision with an oncoming train while both were traveling at high speeds.

India has been grappling with ongoing issues stemming from its inadequate infrastructure, causing disruptions domestically and impacting port operations. These incidents highlight the need for continued investment and improvements in infrastructure to enhance the efficiency and reliability of India’s ports and transportation networks.

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