Hormuz crisis: Kerala's export sector hit as crores worth of cargo remain stranded

Mattancherry: Kerala’s export sector is facing severe disruption as the crisis in the Strait of Hormuz leaves crores worth of cargo stranded at sea, with shipments sent months ago yet to reach their destinations and exporters unable to dispatch fresh consignments.

Several products shipped from Kerala to Gulf and European countries ahead of Onam have reportedly not reached their destinations. The stranded consignments include perishable goods such as vegetables, raising concerns that much of the cargo may no longer be fit for use.

The disruption has dealt a major blow to Onam-focused trade in overseas markets, with crores worth of Kerala products remaining stuck at sea.

With the time approaching to ship goods for the Christmas and New Year season, uncertainty over maritime routes is prompting companies to reconsider or suspend exports. The seafood sector is also facing growing concerns, given the scale of exports from the state.

Seafood companies are struggling to ship products already stored for export. With exporting increasingly being viewed as a risky proposition, businesses are holding back, affecting fishermen and others dependent on the industry.

In one recent case, a vessel that had departed from Kochi was expected to miss its scheduled arrival. The cargo was subsequently unloaded at Mumbai port, where demurrage charges were incurred. The company is now reportedly unable to retrieve the consignment, resulting in losses running into crores.

Shipping costs surge

Liner charges for sending a container to Gulf countries, which were around USD 700 earlier, have now increased to as much as USD 1,500. Charges for European destinations are even higher.

Shipments to Gulf countries would previously reach their destinations within around five days. However, some consignments have remained undelivered even after a month.

Vessels carrying cargo are also being forced to remain at other ports for extended periods, adding to shipping costs. Exporters now face these additional expenses on top of already elevated freight charges, while shipments to European countries remain particularly uncertain.

Empty containers in short supply

Thousands of containers are reportedly stranded at sea, leaving exporters struggling to obtain empty containers for new shipments.

Empty containers are generally returned only after the cargo they carried has been received at the destination. With containers failing to return on schedule, exporters are finding it increasingly difficult to load and dispatch fresh consignments.

The seafood industry faces an additional challenge as its products require refrigerated containers, which are also becoming increasingly difficult to secure amid the ongoing disruption.