Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Cargo handled at 12 major Indian ports fell by 12.43pc to 354.81mn mt in the April-October period from the prior year due to the COVID-19-related lockdowns that lasted for over 4 months, according to the Indian Ports Association. In April-October last year, these ports handled 405.20 mn mt of cargo. October marked the seventh successive month of a drop in cargo volumes.  


Of these ports, cargo movement at JNPT and Kolkata declined by 18pc and 14pc, respectively, while Deendayal Port recorded a drop of 11.5pc. Traffic at VO Chidambarnar fell by 10.8pc and cargo handling at New Mangalore and Visakhapatnam dropped by over 5pc along with a 4pc drop at the Paradip Port. These ports handle about 61pc of the country’s total cargo traffic. 


High freight rates 

A sudden improvement in exports and a slump in imports, especially from China, have created a shortage of containers for exports, said sources at shipping lines. Many shipping lines had to reposition empty containers boxes in the country and move them inland to demand locations at an additional cost due to the pandemic-related lockdowns. Usually, the containers that bring in import shipments are used to ship exports. The combined effect of the Chinese New Year holidays in early October and the Indian festive season in November has disrupted the export/ export cycle, which is less likely to be regularised before February. 


Increased lead time

Port congestion at transhipment ports has increased lead times. Many suppliers are struggling with non-resumption of rail movement which is delaying deliveries by up to two days per container. These delays also impact the eventual availability of boxes in other countries, including India.

Also, the waiting time for exporters to get access to a container is now 2-3 weeks compared to a maximum of 4 days earlier. This has resulted in a sharp jump in landed prices for metal and raw material importers in India, such as ferrous scrap. The clearance period, especially for the Chinese shipments, takes longer than normal amid stricter inspection due to a ban imposed on some products. These restrictions have led to a pileup of containers in some ports and a scarcity at others.

Capacity cut by shipping lines  

The pandemic also led many shipping lines to cut their capacity by about 25pc. Containers that arrived in India prior to the lockdowns took too much time to get cleared. Almost no clearance happened between March 23 and April 15. Both of these factors have affected the availability of containers. 


Currently, there are over 50,000 long-standing containers waiting to be cleared across the country. These need to be cleared by customs on priority basis so that they can be made available by the shipping lines for exports, said sources.  


Leave a Reply

Your email address will not be published.