• Anticipate cargo delays from recent port closures following Cyclone Fani

    07 May 2019

    When Cyclone Fani hit last week, heavy rain and winds of up to 127 mph swept through the coastal areas of India’s Andhra Pradesh, Odisha, and West Bengal States and low-lying coastal areas of Bangladesh. Operations at seaports, land, and air services were halted in both countries. Cyclone Fani, equivalent to a category 4 storm (the second-highest on a five-tier Saffir-Simpson hurricane wind scale), made landfall on May 3 in Puri, Odisha and weakened into a tropical depression by the time it entered Bangladesh.

    Although the cyclone resulted in fewer casualties and lesser damages to infrastructure than initially anticipated, residual disruptions can be expected in the affected regions at least until May 10. While commercial flights have resumed at Biju Patnaik International Airport in Bhubaneswar, delays and cancellations are likely to persist in the coming days after hundreds of flights from both private and national airlines were cancelled prior to the storm. Additionally, a total of 370 trains were cancelled in India though limited rail services have resumed to and from Bhubaneswar on May 5. Services in Puri are also expected to resume in the coming days.

    Power outages were reported in several districts in Odisha, as 3,000,000 customers were without electricity, after strong winds uprooted communication and power lines during the cyclone passage, damaging about 10,000 poles in Bhubaneswar alone. Electricity is gradually being restored in Balasore, Bhadrak, Keonjhar, and Mayurbhanj as of May 5, while some parts of Bhubaneswar are expected to receive full power supply in the coming days. Authorities in Puri stated that they were targeting to restore electricity for 1,000,000 customers on May 6.

    In anticipation of the cyclone’s impact, seaports located along the Indian eastern coastal line including Paradip, Gopalpur, Dhamra, Visakhapatnam, and Kolkata Port Trust temporarily suspended operations for 24 to 48-hours before May 3. In Bangladesh, Chittagong, Mongla, and Payra ports also followed suit and reopened on May 4. While the rest of the ports in India have reopened on May 4, there are no reports to confirm the status of Port of Paradip, which serves as one of the major hubs for India’s coking coal imports. Thus, any prolonged closure or delays to discharge imports may cause backlogs. Moreover, port congestion exacerbated by the recent closures and the start of the Islamic holy month of Ramadan on May 5, especially in Bangladesh, may result in longer vessel berthing times due to the shifting of working hours at the ports. As a result, clearance of container backlogs may take longer than usual.

    The temporary port closures have not led to any declarations of force majeure by shipping companies or manufacturers. Reports indicate that production at National Aluminium Co Ltd, Reliance Industries Ltd, and Indian Oil Corporation’s Paradip refinery, which produces 300,000 barrels per day, were not affected by the cyclone.

    While intermittent disruptions were experienced at state-run companies, operations have been restored at Oil and Natural Gas Corporation Limited and NTPC Ltd. Talcher coal field, belonging to Mahanadi Coalfields Ltd, was the only mine that halted productions due to the cyclone’s impact. The mine saw a production decline to 4.622 million ton on May 3 from 20.123 million ton on May 2. It remains unclear when productions will resume.

    As the cyclone season in the North Indian Ocean runs from April to December each year, customers with frequent shipments and suppliers in South Asia should initiate business contingency plans. The path and intensity of tropical storms and cyclones are difficult to predict and may change abruptly, affecting port operations which may in turn, change vessel schedules. Customers can also expect cargo handling delays and long dwell times at some of the aforementioned ports given that the first week of Ramadan coincided with the first severe cyclone in the region. For any emergency situation, customers are advised to liaise with local contacts to assess if containers have sustained physical damages and can be recovered.

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