Four-pronged plan to deal with Suez Canal blockage, says Indian government

The government on Friday said it has chalked out a four-point plan to deal with the situation arising from the blockage of Suez Canal as it is “seriously hitting the global trade”. The plan includes prioritisation of cargo, stability in freight rates, advisory to JNPT, Mundra and Hazira ports and re-routing of ships via the Cape of Good Hope, the commerce and industry ministry said in a statement, after a meeting with shipping ministry, Container Shipping Lines Association (CSLA) and Federation of Indian Export Organisations (FIEO).

“Blockage of Suez Canal since March 23, 2021 is seriously affecting global trade,”
it said.


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. It is estimated that this backlog should take about a week’s time to clear out,” the ministry said.

This route is used for Indian exports/imports worth $200 billion to/from North America, South America and Europe and includes petroleum goods, organic chemicals, iron & steel, automobile, machinery, textiles & carpets, handicrafts including furniture, leather goods.

Four-pronged plan
While FIEO, and Marine Products Export Development Authority and Agricultural and Processed Foods Export Development Authority will jointly identify cargo particularly perishable cargo for priority movement and work with the shipping lines for the same, CSLA assured that the freight rates as per existing contracts will be honoured as the situation is temporary and is unlikely to have a long-lasting impact.

For the likely bunching at JNPT, Mundra and Hazira, the government said
an advisory to these ports has been sent so as to gear up arrangements and ensure efficient handling during the forthcoming busy period.

On the re-routing decisions, shipping lines were advised through CSLA to explore the option of re-routing of ships via the Cape of Good Hope. Such re-routing usually takes 15 additional days’ time.