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06/14/2019 | Press release | Distributed by Public on 06/14/2019 16:42

Major Indian Port In Path Of Tropical Cyclone

Cboe - Market News Story

Major Indian Port In Path Of Tropical Cyclone

FreightWaves 6/14/2019 5:06:22 PM

Tropical Cyclone Vayu formed in the Arabian Sea earlier this week, the eye brushing by the northwestern coast of India on Thursday, June 13. Ahead of the storm, airports were shut down, schools were closed and hundreds of thousands of people were evacuated. Powerful winds about 70 miles from the eye of the storm reached between 80 and 90 mph in the state of Gujarat, blowing objects around and kicking up dirt, dust and sand. Gusts approached 100 mph, and heavy rain fell for hours.

While govt trying hard, people don't understand. See what happens if u go against cyclone warning

- Vishal Upadhyay (@VishalU15) June 12, 2019

Winds from Tropical Cyclone Vayu hit the Indian state of Gujarat on June 13, 2019.

Damage was minor, and Vayu is now even farther out to sea, no longer a threat to lives and property. However, the latest forecasts show the cyclone taking a turn back toward land by next Monday or Tuesday. Vayu will likely lose some steam over the weekend - maximum winds as of this evening (June 14) India Standard Time are around 85 mph - but by late Sunday evening winds could still be as high as 40 to 50 mph, with gusts near 60 mph (equal to Tropical Storm strength for an Atlantic basin storm).

There's still a bit of uncertainty about the exact path that Vayu will take after the weekend, but if the current outlook pans out, the Mundra Port in India would come close to taking a direct hit. Mundra is India's largest commercial port, and it's the country's only private commercial port to handle more than 100 MMT (million metric tonnes, or mega metric tonnes) of cargo annually. It's also a top-four Indian containerized cargo port.

Operated by Adani Ports and Logistics, the port at Mundra is major economic gateway that caters to the landlocked northern hinterland of India with multimodal connectivity. It's the only port in the country with handling and storage facilities for crude oil, containers, dry bulk, break bulk, automobiles and liquid cargo. Mundra can berth the largest post panamax vessel and can handle four million twenty-foot equivalent units (TEUs).

Strategically situated on international maritime routes, Mundra Port on the Gulf of Kachchh offers multiple benefits for global trade. The Gulf acts as a natural shelter for the port, facilitating 24/7 safe berthing, un-berthing and vessel operations. Compared to other ports on India's west coast, Mundra Port enjoys logistical advantages in reaching the North-West hinterland of India. This makes it the preferred port for the cargo hubs functioning in the union territories of India, as well as its Northern and Western states. However, the Gulf may not always be able to entirely protect the port. A direct or near-direct hit by Vayu could result in at least some minor damage.

SONAR Critical Events: Tropical Cyclone Vayu's position in the Arabian sea as of Friday evening (India Standard Time), June 14, 2019.

As FreightWaves reported last week, India has recently become an increasingly favorable origin of U.S. importers of containerized cargo, with a market share increase of 2.8 percent in TEU volumes from January 1 through May 20, 2019 compared to the same period in 2018. Due to the U.S. trade war with China, those managing supply chains in the U.S. have started to look at the best ways to mitigate the potential risk of tariff-related disruptions, and that has included moving production and/or sourcing outside of China to neighboring countries in the Indian subcontinent.

Now, many of the ocean vessels carrying their cargo from Mundra may be delayed having to wait out the storm. U.S.importers that have scheduled ocean freight from Mundra Port should closely watch Vayu's progress as delays are possible next week. The smaller port of Porbandar may also be at risk, as well as the Reliance Petroleum refinery which is just across the Gulf of Kachchh from Mundra.

Image sourced from Pixabay