India’s Covid Lockdown Threatens Supply Chain

Throughout the pandemic, India benefited from supply sourcing diversification, but the renewed surge in Covid-19 cases challenges the countries’ procurement success. The recent government lockdown threatens to slow the pace of the countries’ containerized freight movement. Labor shortages, port congestion and long dwell times are beginning to be reported.

Labor Shortages

The lockdown restrictions are causing a labor shortage most particularly seen in the trucking sector affecting both short- and long-haulage. Additionally, the labor scarcity is slowing cargo flow out of some ports.

“If labor shortages continue, the disruption could domino, affecting equipment turnarounds and ultimately India’s future export prospects,” said Joe Monaghan, CEO of Worldwide Logistics Group.

Port Congestion

Port congestion is being reported which could play havoc on delivery. “So far vessel utilization is steady, but we’re keeping a close eye on both inbound and outbound. It could change rapidly,” said Mr. Monaghan.

Dwell Times

Equipment shortages were easing; however, signs of a strain on equipment availability foreshadow stressors at the port. Additionally, labor shortages and the tightening of carrier loading capacity double-team the ports, increasing dwell times and threatening port efficiency.

Some Good News from Rail

Rail authorities are mitigating industry concerns by continuing to offer a haulage discount until the end of April 2022. Incentives include a 25 percent rebate for empty container movement and a 5 percent discount for laden boxes on normal tariff rates. Intermodal company Container Corporation of India (Concor) announced in March a 50 percent discount on existing haulage rates for moving empties in April and May. The discount rebalanced ICD inventory levels until the newest lockdowns started.

“We continue to search for any creative ways possible to keep our clients’ cargo moving as efficiently as possible,” assured Mr.  Monaghan.

For more information, please contact your Worldwide Logistics sales representative.