News / Indian rail seeks force majeure amid Iran crisis

Container rail operators in India appear increasingly nervous about volume reliability to keep their train trips moving on schedule amid the Middle East-linked trade crisis.

Rail companies, serving major Indian ports, complained that there had been a dramatic downturn in export/import volumes, impacting the critical mass needed to support viable operations.

Raising those concerns with Indian policymakers, including the Ministry of Railways, the Association of Container Train Operators (ACTO) appealed for immediate government intervention and support at multiple levels.

“Due to the existing disturbances in the Gulf region, we feel that a force majeure like situation has arisen for the movement of cargo from and to India,” ACTO said.

“As responsible service providers, we are making all efforts to engage with stakeholders to ensure that cargo that has been entrusted to us is moved safely to its destinations, but it is also our assessment that the coming weeks might see further serious disruption in the movement of cargo.”

According to ACTO, the incidence of empty train trips had gone up from the usual 5% to 20% in recent weeks, in addition to rail operators finding little cargo for double-stack services.

“Export/import volumes are reported to be down by approximately 40% in the month of March with reductions and heavy fluctuations in both export and import volumes,” the intermodal logistics group claimed.

“Domestic transport volumes in the tile and steel industry with heavy reliance on imports of raw materials have dropped significantly – estimated to be in the range of 10% and increasing rapidly,” it noted.

ACTO complained that while other government agencies like the Ministry of Ports & Shipping had stepped in to support the trade, the container sector was still to receive any such attention from Railways.

Aside from seeking ‘force majeure’ protection, ACTO requested that Railways allow waivers or relief in three areas: stabling charges for train placements, haulage charges for empty train trips occurring between ports and inland container depots (ICDs), and ground rent charges for containers at private ports operating under state government concessions.

Stabling charges are typically the fees paid by private rail companies to Railways towards storing wagons.

ACTO added that government support would help rail operators manage elevated operating costs and avoid passing on any sort of add-ons to their customers in a crisis situation, citing similar pro-trade steps extended during Covid.

That push by rail companies follows interim relief announced by ports, especially Nhava Sheva (JNPA), in respect of cargo stranded in docks following Middle East shipping service suspensions.

Those included a full waiver of ground rent and dwell-time charges for a period of 15 days from 28 February through 14 March for all cargo, and an 80% rebate on reefer plug-in charges for refrigerated cargo boxes.

JNPA, in a new trade update last week, outlined other proactive measures to support affected trades.

It included adding space for temporary transshipment storage for Middle East-bound cargo; facilitating through stakeholders ad-hoc vessel calls for moving Middle East cargo to Gulf ports on the eastern side of the strait Hormuz, such as Fujairah and Khor Fakkan in the UAE, as well as Sohar, Muscat and Salalah in Oman; and priority handling of perishable cargo.