SHAKEN AND STIRRED

The COVID-19 pandemic has partially paralysed the logistics and supply chain, but the industry is still deterred to ensure supply of essentials continues

The world is witnessing an unprecedented crisis, but it has brought an unprecedented focus on logistics and supply chain. The financial, societal and business disruption has seen demand drop across the board, including at ports, trucking and shipping industry, almost anywhere you look. World Trade Organisation has predicted the world trade to fall by up to 32 per cent this year. CRISIL has drastically cut the GDP growth forecast for India for 2021 fiscal to 3.5 per cent from the earlier 5.2 per cent. But shipping and logistics is the lifeline to global consumers and as per directives from the Ministry of Shipping, Government of India, the port sector has been declared as essential services, for maintaining of supply chain link within the country.

There are serious concerns regarding the overall earnings of Indian shipping companies in the first quarter of 2020. There has been a sharp drop in the dry bulk cargo movement since the third week of January 2020. Indian port operators are experiencing a drop in cargo volumes since February start and no one is certain about turnaround time. Cargo movement at ports has seen a sharp drop of around 60 per cent in the last few weeks because of a huge fall in industrial production in the country. Ports across India are operating at capacities less than 30 per cent. The Centre’s move to waive demurrage charges during the lockdown is acting as a disincentive for importers to figure out ways to move cargo.