Why in news?

• The ongoing US-Iran conflict and near-closure of the Strait of Hormuz has created severe logistical disruption for Indian trade.
• India's top export promotion body, the Federation of Indian Export Organisations (FIEO), has written to the ministries of Ports & Shipping and Commerce & Industry flagging two serious problems:
  • opportunistic pricing by foreign shipping lines and non-transparent detention and
  • demurrage charges by port authorities.
• The crisis has hit India's western ports — JNPT, Kandla, and Mundra — particularly hard.

What’s in Today’s Article?

• Understanding the Key Terms
• How the West Asia Crisis Triggered the Problem?
• The Problem of Opportunistic Pricing
• The Labour Shortage Problem
• What Exporters and Industry Are Demanding?
• The Bigger Picture

Understanding the Key Terms

• Detention charges – These are fees levied on exporters or importers when a shipping container is kept beyond the allowed free time outside the port — for example, at a factory or warehouse — before being returned to the shipping line.
• Demurrage charges – These are fees for keeping a container inside the port terminal beyond the permitted free period.
• War Risk Surcharge (WRS) is an additional freight charge levied by shipping lines when vessels pass through conflict zones — reflecting the higher insurance and operational risk.
• When these charges are applied non-transparently, inconsistently, or retroactively, they become a serious burden on exporters — especially during a crisis when they are already dealing with rising freight rates and port delays.

How the West Asia Crisis Triggered the Problem?

• The chain of events is straightforward. The near-closure of the Strait of Hormuz — through which a large share of India's trade with West Asia passes — disrupted shipping routes in March and April 2026.
• West Asia-bound containers that could not be delivered were diverted and temporarily stored at Indian western ports, primarily JNPT (Jawaharlal Nehru Port Trust).
• When the Iran-US ceasefire was announced in April 2026, these stranded shipments began flowing back into the system simultaneously.
• The sudden influx overwhelmed port capacity. JNPT, Kandla, and Mundra — which together form India's biggest container gateway — became severely congested.
• Container evacuation slowed, backlogs piled up, and costs began rising sharply.
• As of June 6, 2026, Mundra Port congestion continues to persist, with the Central Warehousing Corporation (CWC) warning traders of delays in container evacuation, rail transit, and onward dispatch.
• CWC also noted that container loading is being done based on operational accessibility rather than the standard First-In-First-Out (FIFO) basis — adding unpredictability for exporters.

The Problem of Opportunistic Pricing

• The Directorate General of Shipping (DGS) had issued an advisory, asking all stakeholders to "refrain from predatory, non-transparent and opportunistic pricing practices, including levy of exorbitant charges."
• However, FIEO's letter to the government stated bluntly that this advisory is not being followed on the ground.
• Exporters continue to report:
  • Unilateral and non-transparent imposition of detention and demurrage
  • War Risk Surcharge being applied inconsistently — with different shipping lines using different cut-off dates
  • WRS being levied even on cargo already discharged before the conflict began
  • Charges for basic port services like lift-on/lift-off having gone up several times
• The Transparency Problem
  • A particularly damaging issue is the format of invoices from foreign shipping lines.
  • Many lines are merging WRS within the overall ocean freight rather than showing it as a separate line item.
  • This prevents exporters from claiming relief under the government's RELIEF support framework being implemented by ECGC (Export Credit Guarantee Corporation of India).
  • FIEO has requested a uniform and transparent cut-off date for WRS applicability across all shipping lines, and standardised invoice formats that show WRS separately.

The Labour Shortage Problem

• Adding to port congestion is an acute shortage of trailer drivers at JNPT. This has seriously impeded the movement of import containers from terminals to Container Freight Stations (CFS).
• The Shipping Ministry confirmed there has been no strike, but acknowledged the driver shortage has caused delays.

What Exporters and Industry Are Demanding?

• The industry's demands are clear and practical. As per them, during a crisis, relief measures should be announced — not additional charges.
• Also, more storage space is needed so that cargo can be unloaded and moved without accumulating detention charges due to port-side delays that are beyond exporters' control.
• A single point of contact comprising the Road, Shipping, Commerce, and Customs ministries is needed to coordinate crisis response.
• They called for making the entire port clearance system paperless to eliminate delays that compound during a crisis.

The Bigger Picture

• This crisis exposes a structural vulnerability in India's export logistics — one that geopolitical disruptions can quickly turn into a financial crisis for exporters.
• India's western ports are critically dependent on Gulf shipping routes. When those routes are disrupted, the entire export supply chain seizes up.
• There are no domestic shipping lines of sufficient scale to provide an alternative. Foreign shipping lines — which dominate India's container trade — have little regulatory accountability during a crisis.
• The DGS advisory has no enforcement mechanism.
• The result is that Indian exporters — already facing high freight rates — also bear the cost of port congestion, arbitrary surcharges, and a system that has no single crisis management authority.