Market players watchful as talks are underway to avert an India-wide port strike

The Indian Ports Association proposed a revised offer on Aug. 21 for a new wage structure for dock workers to avert a strike called by the unions from Aug. 28.

The move comes as part of ongoing efforts to resolve wage disputes and ensure uninterrupted port operations. The IPA has called the workers federations to discuss the revised proposal on Aug. 27, according to the revised offer signed by Vikas Narwal, IPA's managing director.

Members of the All-India Ports and Dock Workers' Federation called for an indefinite strike across twelve ports in India as no agreement was reached after several rounds of discussion on a new wage agreement.

A request for comment sent to the Indian Ports Association remained unanswered at the time of publication.

Market participants said they are carefully watching the situation as they are unsure of the impact the strike may have. While some believe it would lead to a spillover effect on the entire supply chain, others remain indifferent. One reason for the indifference is that the impact of the strike is limited to government-operated ports and terminals and does not include the private ones.

"The strike is expected to halt the cargo handling at major ports which will in turn lead to severe delays and congestion, further impacting the entire supply chain," an India-based freight forwarder said. "All this will again result in higher operational costs, including demurrage, detention charges, and rerouting expenses," the freight forwarder added.

Suppliers in the petrochemical sector are concerned about the possible disruption in trade flow at a time when post-monsoon revival in demand for certain chemicals is expected.

A major Indian petrochemical player did not see any concern with container movements at these ports but expects a slight impact on liquid chemical movement if the strike goes through. A purified terephthalic acid buyer on the other hand said the strike might be called off soon, and they don't expect any major impact.

"We are concerned about the shipping situation getting upended because of the strike, especially with respect to unloading of cargoes," said a Korea-based exporter of Polymeric MDI. He added that they were awaiting more clarity on the situation.

A freight forwarder mentioned that ports like Kolkata, Haldia, Cochin and Visakhapatnam could be affected by the strike.

The main concern is the mooring crew joining the strike, which could temporarily affect vessel movement, a trade source said, adding that the port is working on this issue to have alternative arrangements even if the strike happens.

"However, there may not be much impact on container cargo, tankers and private port operators like VSPL, VEDANTHA, ESSAR, VCTPL etc.," he added.

In a notice circulated to sources, Singapore-headquartered ONE wrote: "Private terminals will not be participating in the strike, so major ports like Mundra, Nhava Sheva and Chennai will have minimal impact." ONE added that typically these strikes are called off.

Separately, the JNPT Container Operators Association had announced a voluntary suspension of operations beginning on Aug. 20 in response to challenges faced by operators at empty container yards, according to media reports. However, the association decided to defer the planned suspension to Sep. 9, following a decision by the JNPT to draft standard operating procedures to regularize operations at empty yards. The deferral was decided to allow time to implement the SOP and assess their effectiveness.

Spot container freight has yet to see an impact of the strike threat.

Platts assessed PCR 53 North Asia-to-Indian Subcontinent at $1,500/FEU and TCR 53 North Asia-to-Indian Subcontinent at $1,400/TEU on Aug. 23, down $500/FEU and $400/TEU on the week.

Platts is part of S&P Global Commodity Insights.