** Sagar Sandesh print version ceases to be published from December 31, 2017. New look E-paper would be available from Jan. 1, 2018 onwards. free of cost.**

Chennai port has to concentrate on transshipment business: C.R.Raghavendran

Author

(Continued from the previous issue)
Sagar Sandesh: Future of Chennai Port.
C.R.Raghavendra: Chennai port has to concentrate on transshipment business. The two containers terminals operating in the Port should be advised to take up transshipment as one of their priority.
There was ray of hope in the road connectivity front to the Port when the Ennore Manali Road Improvement Program (EMRIP) providing a dedicated lane for container lorries between Chennai and Ennore ports through the congested North Chennai area was commissioned recently. The container movement in eight kilometers of the highway has since been affected as Indian Oil Corporation is digging the area for laying the new pipeline from the port to their Refinery. With the result the service lanes are not available to the container traffic.
Connectivity to the port would improve only when the Chennai Port- Maduravoyal Elevated Corridor is commissioned. Work on the corridor is expected to resume by early next year after the revised detailed project report is completed. The commissioning of the project is expected by 2021.
While the Chennai port has gone through the phase of congestion and is trying to get out of it, the new ports in the vicinity like Katupalli and Kamarajar may also face a similar situation when their cargo handling picks up.
The North Port Access road project conceived nearly ten years ago to facilitate quick movement of containers from these ports to the Kolkata highway has not taken off.  The project was entrusted to the Tamil Nadu government road construction wing a few years ago. But the work is yet to start. If this road connectivity is not provided, Katupalli and Kamarajar ports may face congestion. .
Height restrictions have been prescribed for container lorries crossing the branch railway line linking these Ports with Athipetu railway stations for the past several years s. The electric traction wires come in the way of huge containers entering the port. A suggestion to convert the branch railway line from electric to diesel is pending with the Port authorities for quite some time. With the result the shippers have to shell out at least Rs two lakh  for every movement of large containers as the electric traction lines need to be dismantled temporarily for the passage of container tractor lorries in this section.
SS: The much publicized Puducherry Satellite port project has not taken off. Has the dredging in Puducherry port completed and when will the project take off?
CRR: The Satellite port project faces lot of problems. Initially it was dredging. Availability of containers from Puducherry is also limited since there is no manufacturing industry in the Union territory. As the port is situated in the city, access to it is a problem. Huge containers find it difficult to move through the congested lanes of Puducherry. There are several small bridges in the city through which the container trucks need to cross before reaching the port. Container movement is also restricted to night. The Puducherry port with limited draft could be made a port of call for cruise liners rather than making it handle containers.

Summary of the interview with Mr C R Raghavendra, General Manager, K line and Vice President of Chennai Ennore Steamer Agents Association (CHENSAA)
(For the benefit of the readers)
 
The freight rates in the shipping industry have currently touched the rock bottom and it has to rise from now on. Freight rates are expected to stabilize in the next five years after facing the impact of global recession for long. Mergers and consolidation taking place in the industry in recent years have reduced the tonnage available in the market.
Supply was more and the demand was less for the last couple of years but the equations may change with mergers and consolidation taking shape in the industry.
Citing an instance to the low in international freight rates, the Ships in India-Far East sector operate on a Nil freight basis, Shippers have to pay no freight in this sector. Cargo movement taking in this sector is merely movement of empty EXIM containers rather than earning from it. Rates have touched the rock bottom and from now on, they are bound to increase.
Taking these factors into account, the Shipping companies should think twice before expanding their capacity, go in for joint ventures and enter into a limited partnership with firms for a few services
The volume of Indian trade is not that huge to be affected by the on-going trade war between United States and China, Moreover Indian exports are more to China which is not going to be affected the tussle. Whether India’s imports from United States and European Union are going to be affected, time alone can give the answer. It is too early to predict the trade routes that are likely to be affected by the trade war.
On why West coast ports have scored over Chennai port in container handling even though Chennai stated the business much ahead, the ports in India have to cater to the manufacturing base that is situated around the National Capital Region and central India.
Chennai port started container business way back in 1980s much before west coast ports thought about it. The Japanese K Line alone sent four freight trains from Chennai to Delhi per week for nearly two decades till 2000. In the Chennai Delhi sector passenger trains get precedence over freight trains and hence cargo movement got delayed. Gradually cargo movement from Chennai to Delhi stopped and the traffic moved to the west coast.
Learning lessons from the experience of Chennai port JNPT had built a dedicated railway line to Delhi nearly fifteen years ago. Mundra port in Gujarat also has a dedicated freight corridor with Delhi. They managed to send the cargo to the national capital region within 48 hours.
The ports in the east coast including Chennai are situated in the peninsula, where their hinterland cannot go beyond Bengaluru and Mangalore.
While the west coast ports by virtue of establishing links with the manufacturing base in North India are able to offer return cargo for the containers, the same is available in limited quantities from East coast ports. Hence Liner vessels shy away from making a detour of two and a half days to reach Chennai port and instead land the cargo in JNPT or Mundra for onward movement to National capital region Or Central Indian cities of Nagpur and Hyderabad.
With the introduction of direct port delivery of imports and Direct Port entry of exports bypassing container freight stations, the turn over CFS will come down. In Chennai port alone where over thirty container freight stations operate, the turn- over has come down by nearly thirty per cent.
The container freight stations were set up due to the demands of the trade and governmental policies. They were designed to take care of the congestion in ports. There is the threat of congestion recurring at ports if the role of CFS is minimized. We should not go back to the same situation the trade faced nearly ten years ago when congestion wrecked the ports. The government should work closely with the trade to avert the problem.
In Chennai port, the direct port delivery of imports accounts for 40 per cent of the turn-over of the containers handled. The figure may go up to 55 per cent. In nearby Katupalli port, the DPD turn-over is sixty per cent. But it cannot go beyond 80 per cent under the present conditions.
The direct port entry has taken off in a big way only in newly constructed private ports which offer lot of apace for containers. For instanced the entire exports of Katuapalli is through Direct port entry which offered the trade a competitive edge. The DPE have not taken off in Metropolitan ports like Mumbai or Chennai which cannot offer space for storing containers.
Mr Rahavendra had a few suggestions to offer to the Customs authorities to kick start coastal shipping which has not taken off in Indian ports despite several concessions offered by the Shipping Ministry. The Ministry of finance and shipping should think of out of the box solutions to end the impasse.
For example coastal ship operators should be allowed to take EXIM cargo from Colombo port en-route while moving from coast to coast since transport of coastal cargo alone will not be feasible for the vessel operators. The confusion of handling both coastal and EXIM cargo at the same time in one terminal could be resolved. The coastal containers should be painted in a particular color so that they may be taken out separately on landing at the terminal while e EXIM containers can follow the prescribed route.
The trade in Chennai is asking the customs authorities to allow movement of empty EXIM containers from one Indian port to another. The empties may be used for carrying coastal cargo. The modalities are being worked out based on the customs notification issued way back in 2001. Ironically the notification was not implemented so far. The proposal may take shape in six months.
Until a few months ago some ports like Mundra which are handling containers on a manual basis were allowed to have transshipment business by the customs but ports like Chennai where movement is controlled electronically were denied the facility. Now all the ports have been allowed to do transshipment business. Foreign vessel operators not longer have to contend with different laws in different Indian ports as far as transshipment of containers are concerned..
Different sets of laws are being enforced by the immigration authorities in east and west coast ports. The authority functioning under home ministry denies certain shipping activity in east coast port while the same is allowed in west coast ports. Ironically the west coast ports like Mumbai or kanlda face more security threats compared to the ones in the east coast. The laws should be streamlined.
The satellite port project at Puducherry to relieve the congestion in Chennai port may not take off immeidately due to various reasons including infrastructure problems and lack of adequate traffic from the Union territory.