West Asia tensions impact, government asks ports to reduce charges
With shipments affected due to rising tensions in West Asia, the government has asked 12 major ports in the country to provide relief in storage and other charges on cargo, to ease the hardships faced by exporters and shipping companies.
Due to rising tensions in West Asia, many cargo shipments from India are stranded. In response to this situation, the government has asked the country's 12 major ports to consider waiving or reducing certain fees charged on such shipments.
According to reports, the Ministry of Ports, Shipping and Waterways on Friday directed port authorities to consider requests for reduction or waiver of fees such as storage rent, reefer plugging fees (cold container charges), and ship-changing expenses. Shipping Secretary Vijay Kumar, after a virtual meeting with industry officials, said ports should not impose additional fees during the current disruption.
Additional arrangements for stranded cargo
According to the report, ports have also been advised to allow cargo bound for West Asia to be stored as transshipment cargo for the time being, and to provide additional storage space if needed. Furthermore, export cargo held at ports may be facilitated to be repatriated to the domestic market in coordination with customs officials.
Priority given to perishable goods
The government has also asked ports to prioritize handling of perishable cargo to prevent spoilage. They have also been asked to increase fuel supply (bunkering) capacity to ensure ships have adequate fuel when needed.
Fears of shortage of containers and ships
This move follows concerns raised by shipping companies, exporters, and state-owned oil companies. Industry figures fear port congestion and a shortage of containers could occur within the next two to three weeks.
The meeting also recommended allowing more foreign-flagged vessels to carry domestic cargo to alleviate the shortage of ships and containers and address rising freight rates.
There is also discussion on increasing insurance premiums
Meanwhile, the Director General of Foreign Trade (DGFT) informed industry insiders that discussions are underway with insurance companies, the General Insurance Council, and the Export Credit Guarantee Corporation of India to address the issue of rising insurance premiums due to the crisis.
The Reserve Bank of India has held meetings with the Indian Banks Association and the State Bank of India. Banks operating in West Asia have been asked to allow their employees to work from home, so that the work of exporters, importers, and shipping companies is not disrupted.