Suez Canal blockage: India's 4-point plan to deal with situation

Ramya Patelkhana
·3-min read

Suez Canal blockage: India
Suez Canal blockage: India

27 Mar 2021: Suez Canal blockage: India's 4-point plan to deal with situation

The Indian Government has come up with a four-pronged plan to deal with the situation arising from the massive traffic jam in the Suez Canal as the blockage is badly hitting the global trade.

The plan—chalked out at a meeting on Friday—involves re-routing ships via Cape of Good Hope, prioritization of cargo, stability in freight rates, and advisory to certain ports.

Here's more.

Details: 200+ vessels waiting on Suez Canal's North and South sides

The meeting—convened by the Department of Commerce's Logistics Division—was chaired by Pawan Agarwal, Special Secretary (Logistics).

It was attended by the Ports, Shipping, and Waterways Ministry, ADG Shipping, Container Shipping Lines Association (CSLA), and Federation of Indian Export Organizations (FIEO).

Officials noted over 200 vessels were waiting on Suez Canal's North and South sides, and around 60 vessels were queuing up there every day.

Statement: 'Backlog should take about a week time to clear out'

"If two more days are taken before the efforts result in clearance of the canal, the total backlog created would be about 350 vessels," read a statement issued by the officials who attended the meeting.

"It is estimated that this backlog should take about a week time to clear out. It was decided in the meeting to closely monitor the situation," said the Ministry.

Cargo, freight rates: Authorities to identify, prioritize movement of cargo

Under cargo prioritization, the FIEO, Marine Products Export Development Authority (MPEDA), and Agricultural and Processed Food Products Export Development Authority (APEDA) will identify cargo—especially perishable cargo—for priority movement.

Also, CSLA assured freight rates will be honored as per existing contracts.

"A request has been made to the shipping lines to maintain stability in freight rates during the period of this crisis," the statement read.

Advisory, re-routing: Shipping Ministry to issue advisory to certain ports

Meanwhile, the Ministry will issue an advisory to the Jawaharlal Nehru Port Trust (JNPT), Mundra, and Hazira ports to make arrangements, ensuring efficient handling as some bunching may occur at these ports once the blockage is cleared.

Apart from that, shipping lines would be advised to explore the alternative of re-routing ships via Cape of Good Hope, although such re-routing generally takes 15 additional days.

Global trade hit: Suez Canal route is used for $200bn-worth Indian exports, imports

The Commerce and Industry Ministry earlier also said that the Suez Canal blockage since March 23 is "seriously hitting the global trade."

To note, this route is used for $200 billion-worth exports and imports between India and North America, South America, and Europe. The imports/exports include petroleum goods, organic chemicals, iron and steel, automobile, machinery, textiles, carpets, handicrafts, including furniture, leather goods, etc.

About: Suez Canal connects Mediterranean Sea, Red Sea through Egypt

The Suez Canal, a 193km-long, artificial sea-level waterway, connects the Mediterranean Sea and the Red Sea through Egypt. It is the shortest sea route between Asia and Europe.

On Tuesday, a massive, 200,000-ton container ship named Ever Given, which is operated by Taiwan's Evergreen Marine, ran aground and got stuck sideways across the canal, blocking it reportedly after being hit by strong winds.