No sooner has the Union’s Department of Maritime Transport established a protocol for ships calling on Indian ports to fight COVID-19, importers, especially for the cement industry, are already considering a escalating costs due to the 14 day quarantine period.
“India imports large quantities of limestone from the United Arab Emirates (United Arab Emirates), Qatar and Oman, where the trip takes around three to four days. Now ships will have to wait another 10 days before docking here. For this reason, the shipowners will budget for the additional waiting time due to the quarantine. This will increase the cost of transportation for importers, which will have an impact on the cement industry, “said Rahul Bhargava, Director (Commercial and Operations) at Essar Shipping at Business Standard.
Limestone is used in the manufacture of cement.
According to the protocol put in place over the weekend by the Ministry of Navigation, ships arriving in Indian ports from infected countries before 14 days of departure from the infected port must be quarantined until the end of the 14 day period. India imports large quantities of dry bulk, liquid bulk and containers from countries in West Asia and Southeast Asia, from which shipping takes less than 14 days.
“This will be a serious problem for importers of limestone, mainly on the west coast, where the product generally arrives in the ports of Gujarat. Their transportation cost is expected to increase by 35-40% as the costs of fueling and charter will increase for an additional number of days, ”said Bhargava.
While the short haul will take a hit, for the long haul, where limestone ships move from these countries to the east coast of India, the journey takes around 10-11 days, escalating costs only will not be so high. “The number of additional days (to compensate for the quarantine period) is less, which means that transportation costs for importers from the east coast will not be affected much,” said Bhargava.
From West Asian countries such as Saudi Arabia, Iraq, the United Arab Emirates, Oman and Qatar, India largely imports its crude oil and limestone.
Imports of crude oil will not have much impact since India and Iraq, India’s main suppliers, are not among the 22 countries infected with COVID-19.
Ships arriving from any port in China, where the virus is believed to originate, will also have the necessary quarantine period of 14 days, the ministry said.
Either India receives Chinese freight directly, or it is transhipped via the port of Colombo in Sri Lanka or via Singapore. India imports electronics, spare parts, electronic intermediaries such as chips and other components of gadgets from the dragon country in large quantities.
Whether it is a direct trip or a transhipment, it takes about 15 to 20 days for a container load to arrive in India from China (wherever it is the port of Chennai or Jawaharlal Nehru Port Trust).
“The Chinese cargo will have to be quarantined at the border of the port and the terminal, which will entail demurrage charges per day (for 14 days), which the port will collect from the cargo. This will drive up the costs of transportation for the importer, but here the port has the freedom to offer discounts or hesitations based on business conditions in the current scenario, “said Subrata K. Behera, director of research on sports and containers at Drewry, an agency in London. of maritime research based in Geneva.
Meanwhile, Indian exports are also expected to be affected in the coming days as industrial factories are operating at a minimal level due to weak demand and downsizing in various locations will also have an impact on foreign trade, officials said. Of the industry.