The Hindu Business Line : Congestion surcharge on shipments to US from Nhava Sheva

CONTAINER shipping lines operating to the US and Canada have decided to impose a port congestion surcharge of $50 per twenty-foot equivalent unit (TEU) and $100 for a forty-foot equivalent unit (FEU) on all shipments moving from the P&O Ports run Nhava Sheva International Container Terminal (NSICT) to the US and Canada. The extra levy will jack up the cost of India's exports to the US and Canada.

While the Indmex consortium, comprising the state-run Shipping Corporation of India, Contship Container Lines, CMA-CGM and APL, has started levying the surcharge from October 15 on shipments from Nhava Sheva to the US, other lines serving the Indo-US sector will impose the surcharge from November 6, a container shipping line official said.

"All the four individual member lines of the Indmex consortium have filed the levy of surcharge with the Federal Maritime Commission (FMC) on September 15 for applicability from October 15, which is mandatory as per US laws," Mr S.S. Rangnekar, Director, Liner & Passenger Services, SCI, told Business Line. It is mandatory for all lines operating to and from the US to intimate the FMC and get its approval for any increase in rates 30 days in advance. The congestion surcharge levied by the Indmex consortium is only on cargoes shipped from Nhava Sheva to the US, Mr Rangnekar stated.

Other major lines operating from Nhava Sheva to the US such as Maersk-Sealand, Safmarine, Evergreen Marine, P&O Nedlloyd, NYK Line, UASC and Hapag Lloyd, among others, will collect the surcharge from November 6, a top official of a container line servicing the Indo-US sector told Business Line.

The decision to impose a surcharge comes in the wake of a severe congestion facing the premier container port in the country, which handles 55 to 60 per cent of the total containerised cargo in the country.

Justifying the move to levy a surcharge he said: "Lines are loosing heavily as containers are waiting outside the port."

Though, the Government has initiated steps to ease the congestion problem, he said that it would take a long time before normalcy is restored. " It is not an easy job. Logistics does not permit it to get resolved so soon", he stated.

Exporters and shippers have criticised the imposition of surcharge saying that they were being forced to pay extra costs due to the fault of P&O Ports, the private container terminal operator at Nhava Sheva. " Shippers cannot be blamed for the congestion.

The fault lies with P&O Ports for handling 1.2 million TEUs within four years of starting operations at Nhava Sheva as against a designed capacity of 6,00,000 TEUs and that too without having adequate arrangements to evacuate the cargo", a trade source said.

According to estimates, there are currently about 13,000 boxes awaiting shipment at NSICT, compared with 19,000-20,000 containers a week ago. " This has hampered our business very seriously", the container line official said.