At a time when India’s trade flows have been adversely affected due to the West Asia conflict, with shipping routes disrupted, containers in short supply, and freight costs surging, a fresh disruption has emerged at Mundra, the country’s busiest private port.
An operational issue has escalated into a strike by empty-container yard operators, putting nearly 5,000 containers a day at risk of being held up and adding another layer of uncertainty to an already strained export-import supply chain.
The immediate trigger is a decision by Adani Ports and Special Economic Zone (APSEZ) to freeze empty yard codes located outside the port/SEZ limits from September 1. The port is controlled by APSEZ. Shipping lines would instead have to nominate empty containers to designated depots within the Mundra SEZ.
In a circular issued by Adani Ports and Logistics on August 21, the company said the move is aimed at reducing road congestion, improving vehicle turnaround, and strengthening safety and security, besides addressing what it describes as misuse of empty-depot codes. It highlighted that instances of misuse of the empty depot codes were brought to its notice.
In a reaction to the decision, the Mundra Empty Container Yards & Allied Services Provider Association (MECYASA) went on strike, affecting the return of empty import containers and availability of empty containers for factory stuffing. The operators have said that it threatens the viability of their business.
From midnight on September 1, Kandla Mundra Container Transport Association (KMCTA) will extend support to the empty yard. In a trade notice issued on Monday, it said that containers will not be picked up by the Association members. It further said that their members would keep their vehicles off the road voluntarily.
Sources in the know of the developments said the situation can snowball into a larger problem if the strike continues even for a few days.
“The effect will be seen in the next couple of days as the transporters go on strike. Import and export will be affected. The empty yards within the SEZ can cater to only 20% of the business,” said Bhagirathsinh Jadeja, president of KMCTA.
Narendra Joshi, a freight forwarder and partner in one of the empty container yards, told FE that they are not giving empty containers to the shipping lines. Fearing that the exports could be affected as the movement will be held up, Joshi said that empty yards within the SEZ would not be able to cater to the requirement.
Sources said that Mundra Port roughly handles an estimated 19,000 to 23,000 plus 20-foot equivalent units of container cargo on a daily basis, which roughly translates into 10,000 to 14,000 containers.
Mundra Customs Brokers’ Association (MCBA) warned that a prolonged shutdown of empty-container yards could cause significant hardship to cargo owners. The Federation of Freight Forwarders’ Associations in India (FFFAI) has also sought the intervention of the Directorate General of Shipping.
A similar representation has also been made by the Container Freight Stations Association to the APSEZ, according to reports. It has reportedly said that restricting empty containers to port-nominated depots would reduce operational flexibility across the import-export supply chain.
Manoj Aervadiya, president of the Morbi Ceramic Association, said their exports would be affected if the strike prolonged. “As such, the exports are at 20% due to the West Asia crisis,” he observed. According to sources, exports from the industrial cluster in Rajkot and spices from Unjha have also been affected.