Shippers eye alternate ports as disputes lead to Jawaharlal Nehru cargo chaos

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Major shippers in India are considering switching from the main import-export hub of Jawaharlal Nehru port to alternate gateways after weeks of strikes and go-slows created a huge cargo backlog.

Late last month, dockworkers at the DP World-managed Nhava Sheva International Container Terminal (NSICT) went on strike over wages, followed during the past three weeks by a go-slow at neighbouring Gateway Terminals India (GTI), operated by APM Terminals, as well as at the port authority-operated JNP container terminal.

As a result, GTI’s export gates have reportedly been shut for the past 10 days – just when India’s exports were beginning to climb again after months of flat demand.

R Venkatesh, vice-president of the Western India Shippers Association, said the congestion in the yard had spilled onto the surrounding roads.

“Abrupt closures of the terminal gates – caused by inadequate container yard space inside the port – has, in turn, triggered acute road blockages leading to the terminals.

“It is reported that there is virtually a 15-17km queue of trucks awaiting entry, and each truck, when it is lucky, manages to move about 2km  10 hours,” he said

There is also congestion at the neighbouring NSICT and JNP terminals, which do not have the capacity to handle the overflow of boxes seeking other vessels on which to load. Mr Venkatesh said carriers had adopted a dual-berthing strategy to try and load boxes at the other two terminals, NSICT and JNPCT ports, either on additional payment scheme or by some other business commitments.

“It needs no emphasis that these costs will be passed on to the shippers.”

He added that the congestion on the main highways leading to the port had now spread to the roads around container freight stations that supply the sea port terminals with export boxes.

Anupam Shah, chairman of India’s Engineering Export Promotion Council, has called for intervention by the country’s shipping ministry to resolve the dispute, and meanwhile, Mr Venkatesh said, shippers were now drawing up plans to use alternative ports – principally those to the north in Gujarat state, such as Mundra.

“Shippers are dismayed that despite the situation developing as far back as the beginning of October, the authorities concerned do not seem to have given any serious thought on the issue.

“The latest market sentiments indicate a definite possibility that the lines will shift their operations to Hazira port, as they did about a decade back when the NSICT threw up similar problems.

“The time has perhaps come now for the shippers also to drop the JN port terminals just like the shipping lines,” he added.

Inchcape Shipping Services said that some shipping lines, prior to loading from port of origin, had reduced JNP imports by routing 40-50% through neighbouring ports, while CMA CGM has notified Indian exporters using its Europe Pakistan India Consortium (Epic) service that outbound boxes should be delivered to Mundra, rather than NSICT.

Last year the three terminals at Jawaharlal Nehru handled a combined 4.26m teu, way above its designed capacity. The port authority has awarded DP World concession to build and operate a new single-berth facility alongside its existing terminal, which is expected to be operational in 2015.

Representing a $200m investment, the new terminal will have 330 metres of quay length with a depth alongside of 13.5 metres, 17ha of yard and an annual handling capacity of 800,000teu. The concession period is 17 years.