Chennai port has
announced sizeable concessions to the tune of 70 per cent on Vessel Related Charges
(VRC) on coastal vessels carrying Transshipment cargo in a bid to encourage
aggregation of EXIM cargo at the port, an open invitation to the Mainline
shipping vessels to include Chennai port in their itinerary in a big way.
It has been decided to
grant a flat concession of 70 per cent on Vessel related charges of Chennai
Portís Scale of Rates for Coastal vessels carrying transshipment containers.
The concession will be increased to eighty per cent if the particular service
reach (Chennai port) 25 voyages in a year.
Similarly, for foreign
vessels, a concession of five per cent on Vessel Related Charges will be given
in addition to existing concessions while handling transshipment containers, an
official release of the Chennai Port said. The port release expressed
confidence that these concessions will give further encouragement to EXIM
transshipment containers in Chennai port.
With the implementation
of these concessions, it is expected that transshipment of Indian containers
which present is happening in neighboring international ports like Colombo and
Singapore is expected to be attracted through Chennai port.
Chennai port has conceived
the idea a few months ago after the nearby Krishnapatnam Port achieved success
in the transshipment business for the last one year. The new private port in
Southern Andhra Pradesh started aggregating transshipment cargo from Haldia and
Kolkata ports. Shreyas Shipping line, a domestic operator was assigned the task
of ferrying the cargo from the West Bengal ports. These cargo, were otherwise moved
to Singapore for their onward journey to various international destinations.
The mainline vessels which call at Krishnapatnam port picks up the cargo.
Chennai Port has now
thrown its bait. The idea of aggregation of EXIM transshipment cargo was
conceived in early 1980s by the state owned shipping corporation. The port
chosen by the SCI was the VOC Port Tuticorin. However the project did not take
off due to bureaucratic hurdles.
At present nearly eighty
per cent of Indian transshipment cargo especially from the east coast ports are
transshipped through Colombo, Singapore and Port Klan ports. Out of this nearly
43 per cent is handled by Colombo alone. An Indian shipper has to shell out of
at least one hundred US dollars per TEU when they transship their cargo through
Colombo or Singapore. Exporters operating on thin margins are seriously
affected by the international transshipment as their competitiveness of their
goods get compromised.
Government of India has
been taking several measures to increase the transshipment of containers
through Indian ports. The recent relaxation of Cabotage Law by the Government
of India is one such effort to make Indian ports transshipment hubs. Under this
scheme the government has permitted foreign flag vessels to pick up Indian
coastal cargo which was otherwise the preserve of domestic shipping lines.
The cabotage relaxation
is expected to bring greater competition to the feeder market and reduce feedering
rates encouraging the use of Indian ports and terminals for aggregation and
transshipment purposes which may benefit local importers and exporters. The
cost of handling will come down for exporters.