China Worried About Indian port Slowdown, As Chinese Exports May Get Affected Badly
Some Indian ports are slowing down during the country’s devastating wave of Wuhan -19 cases, including those major ports handling shipments from China. Chinese logistics companies worry that the suspended operations might cause further delays in their future manufacturing and shipment of cargo.
Chennai port has significantly reduced its operations. The port decided to cut its staff and facility operation from Monday to May 16, reduce working hours to 11am-6pm each day, and ask other staff to work remotely. This is in view to break the spread of Wuhan Virus.
Chennai is among the top four ports carrying shipments between India and China, alongside New Delhi, Mumbai and Kolkata. It is a leading port for big Chinese phone makers and new-energy vehicle companies, such as Vivo and BYD, which have business operations in India. The reduction in port staff is likely to extend customs processing time from about four days to as long as two weeks.
“We are telling clients in China to prepare to shift shipping routes from Chennai to other ports, but we are afraid that it will intensify the pressure on the other ports,” said Xie Cheng, a manager from Kahan International Import & Export, a major India-China logistics company based in Foshan, South China’s Guangdong Province.
Signs of stress have been showing at other ports. Late last month, Kandla port, the nearest port to the Indian capital New Delhi and the largest port in India by cargo throughput, suspended operations from April 24 due to “a sudden massive resurgence in Wuhan-19 cases.” It has yet to announce a reopening.
On Friday, Visakhapatnam, the biggest port, importing coal to India, announced a suspension of operations until May 19.
As other ports are getting crowded, telecom devices and clothing from China, are stranded, As the government is making efforts to prioritize medical supply processing. Local logistics systems initially paralyzed by the pandemic, sharply reduced the number of truck drivers and delivery staff available to pick up the cargo from customs. However now these are reaching back to their original functioning.
In April, almost one-quarter of truck drivers working at the Mumbai port were absent, either because they had fallen sick or that they needed to attend to family members.
Though initially the same happened to air freight, they bounced back magnificently. Medical supplies began arriving at major airports like New Delhi, and airports began to handle unprecedented pressure from rising incoming supplies. Delhi airport received more than 300 tons of medical supplies in five days before May 3.
The crowded ports are now handling sea and air cargo rates efficiently.
However the shipping rates from China to India has almost quadrupled in May from March. For a small container to be delivered to India, the rate spiked to almost $2,000 as of the end of last month, compared with $500 at normal times.
“The rates have gone up because shipments to India are now mostly one-way deliveries,” Xie said. “The vessels headed to India can only return with empty containers back to China.” India has started reducing its trade with China in a big way. The items still coming from China are those for which payments have already been made by Indian Companies.
Though extended declaration times at Indian customs are also pushing up rates. As for security and medical reasons, anything coming from China are being checked doubly checked. It will thus take a much longer time for vessels to return to make another shipment.
Air freight rates from China to India more than doubled this month for the same reason.
