Singapore's PSA, container freight operators warn of congestion at Indian ports

By Aditya Kalra and Sudarshan Varadhan

NEW DELHI/CHENNAI (Reuters) - Singapore's PSA International and Indian container freight operators have warned the Indian government that its order to waive container storage charges during the coronavirus lockdown could lead to port congestion, letters seen by Reuters showed.

India's Ministry of Shipping asked ports to allow free storage of containers as part of relief measures to ease pressure on companies hit by logistics restrictions because of India's nationwide lockdown.

PSA's local unit in a letter to the government on April 24 said importers might not remove their containers from ports due to free storage, adding India's "high-risk strategy" could clog terminals and hit the supply chain, instead of helping it.

"The risk then is of the terminal running out of space, first for exports ... and then for the entire terminal, at which point operations are effectively paralysed," PSA wrote in the letter seen by Reuters and not previously reported.

"We do not believe it is correct to attempt to exercise commercial control over the pricing in this market," it said.

India's shipping ministry did not respond to a request for comment. PSA, which said in its letter it would comply with the government's order, did not respond to Reuters queries.

PSA operates four large terminals across India, the biggest being near Mumbai inside state-owned Jawaharlal Nehru Port Trust (JNPT), which handles more than half of the container cargo across all of India's major ports.

Units of Denmark's A.P. Moller-Maersk <MAERSKb.CO>, the world's biggest container shipping group, and Dubai's DP World <DPW.DI> also have terminals at the JNPT. Both those companies did not respond to a request for comment.

In an April 16 order to ports, the shipping ministry highlighted "unusual and massive shock from the disruptions" due to lockdowns across the world, calling for free container storage and saying no penalties should be levied for delay in berthing or evacuating cargo.

India's Container Freight Stations Association said in a letter to the state-run JNPT on April 23 that such rules were turning out to be "counterproductive", saying its container storage facilities were "almost full to (the) brim".

The association's secretary general, Umesh Grover, wrote in the letter seen by Reuters that importers did not want to risk bringing their cargoes out the pandemic and they "believe that their cargoes are lying safe with custodians free of cost".

Grover said that, by encouraging unlimited waivers, the freight stations and ports would choke up faster.

The association did not immediately respond to a request for comment. JNPT declined to comment.

(Reporting by Aditya Kalra and Sudarshan Varadhan; Editing by Edmund Blair)