The Hindu Business Line : Shipping lines to impose `carrier security charge'

THE country's export-import trade will have to bear additional costs, with shipping lines deciding to impose a "carrier security charge" globally to recover the costs incurred on making ships compliant with the International Ship and Port Facility Security (ISPS) Code.

Maersk Sealand, the world's largest container shipping line, has started levying a carrier security charge of $6 (Rs 270) per container irrespective of the size of trade at the ports/terminals it operates from, including India.

P&O Nedlloyd has also announced the introduction of a carrier security charge of $6 per container at all "core ports" worldwide with effect from January 1, 2005. In India, the carrier security charge will be applicable at Nhava Sheva, Mundra and Tuticorin ports where vessels of P&O Nedlloyd call.

The new charge will be applicable for direct as well as feeder calls, which eventually require transhipment from a hub port. "However, for transhipment cargo, we will not charge double," a senior official with P&O Nedlloyd told Business Line.

In addition, origin and destination terminal security charges will be passed on separately as and when they are applied to P&O Nedlloyd by terminal operators/port authorities to recover the costs incurred by them to comply with the ISPS Code, he said.

Other major container shipping lines operating to and from India are also considering the introduction of a similar carrier security charge and a final decision in this regard would be taken soon, a Container Shipping Lines Association (CSLA) official said.

While ports/terminals in India are yet to levy origin/destination terminal security charges from shipping lines, this has already come into force at ports/terminals in Europe. Shipping lines such as Maersk Sealand have started passing on the charges paid by them to ports/terminals in Europe to Indian importers, while collecting the freight. In the case of Indian exports, the burden is currently on the overseas importer who pays the freight bill.

"Until recently, P&O Nedlloyd has resisted the additional costs from ports/terminals, but like all other lines, P&O Nedlloyd faces the threat of ships being turned away at ports if the terminal security fee levied by the operator is not paid," the official said.

Though it is an additional cost to the trade, shipping lines argue that it allows the trade to operate. "If ships don't comply with the ISPS Code, they would be prevented from moving from port to port and the trade would come to a halt. It's a trade-off," a Maersk Sealand official said.

The ISPS Code is designed to protect ports and international shipping against acts of terrorism.

The International Maritime Organisation agreed to include the ISPS Code into the Safety of Life at Sea Convention (SOLAS) at the end of 2002 and this has come into force from July this year.

The code contains detailed security requirements for implementation by Governments, port authorities and shipping companies.

It subjects ships to a system of survey, verification, certification and control to ensure that security measures are implemented.