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Traders relieved as ship blocking Suez refloated, say next week crucial in establishing normal traffic

Indian exporters and importers have heaved a sigh of relief over news reports that the MV Ever Given, which has been blocking the Suez Canal for nearly a week now, is refloated.

March 29, 2021 / 04:14 PM IST
In this photo released by the Suez Canal Authority, the cargo ship sits with its bow stuck into the wall. (Image: AP)

In this photo released by the Suez Canal Authority, the cargo ship sits with its bow stuck into the wall. (Image: AP)

As the Suez Canal Authority tries to secure and stabilise the MV Ever Given after managing to refloat it early on March 29, and with hundreds of ships waiting to cross the canal, traders said the next week would be crucial as Indian ports see a pileup of cargo and a traffic gridlock is expected soon.

Traders say the next 3-4 days will be important for establishing normal shipping and process merchandise shipments. The outcome will depend on how well international authorities, the government, ports and the private sector collaborate to do that.

The initial news from Cairo has been optimistic after intensive efforts involving more than 10 tugboats to forcibly free the ship from the right bank of the canal bore fruit during spring tide on Monday morning.

While this has been followed by sighs of relief among traders and manufacturers, some have said the cheer was premature and they would wait and watch over the next 5-6 days. "More than 300 ships are currently waiting on both ends of the canal to pass. Many of them are supertankers carrying crude. But at certain points, the canal is narrow to the extent that only a single ship can pass at a time, according to the Suez Canal Authority's own rules," a senior functionary of the Federation of Indian Export Organisations (FIEO), said.

As a result, it may take up to 3-4 days for normal traffic to resume, he added. The Suez Canal remains the primary route for all goods moving from Asia to Europe. The recent bottleneck on the Suez Canal is holding up an estimated $10 billion worth of trade a day, according to the London-based shipping journal Lloyds list.

Currently, ships take an average of 17-18 days to travel between ports on India's west coast and Western European ports such as Rotterdam. But the journey's duration also depends on transhipment, whereby ships make multiple stops along the way. Egypt's Port Said, at the northern end of the Suez Canal, is an important stopover and freight forwarders say that the waiting line of ships is getting longer there, and may further extend the delay.

On the other hand, customs agents say the goods clearance times at major ports such as JNPT in Mumbai, Mundra and Hazira are bound to go up after the current challenge ends as authorities will face a sudden rush of traffic. "Even if there is a delay for 3-4 days the entire supply chain gets affected. Care has to be taken to expeditiously clear cargo once it reaches the ports. The Shipping Ministry has issued an advisory to these ports so as to gear up arrangements and ensure efficient handling during the forthcoming busy period," Vijaykumar added.

Subhayan Chakraborty
first published: Mar 29, 2021 04:14 pm