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Amit Mitra

Mumbai , Feb. 2

THE Ministry of Shipping has initiated a move to study the implications of establishment of a Maritime Commission of India, on the lines of the Federal Maritime Commission (FMC) of the US, to regulate the activities of the various ocean transport logistics service providers such as shipping lines, shipping agents, freight forwarders, consolidators, ICD/CFS operators and Concor.

The Joint Secretary (Shipping), Mr Sushil Kumar, has called for a meeting with representatives of various port users, including shippers and freight forwarders, in New Delhi on Thursday to get their feedback on the proposal.

A section of shippers have been asking for establishment of a regulatory body for quite some time now, especially in the light of increasing costs in the tariff system. The existing tariff system is often characterised by complicated and non-transparent structure, with a string of surcharges such as terminal handing charge (THC), documentation charges, AMS surcharges and container-related surcharges such as cleaning charges and survey fees.

"This is further confounded by the unregulated and non-transparent landside charges levied by the myriad transport logistics providers. This is due to the fact that there is absolutely no regulation to vouchsafe the credibility, capability and financial soundness of the operators, not any mechanism to monitor their activities," according to Mr S.R.L. Narasimhan, Secretary of Western India Shippers Association.

Another justification trotted out by shippers' organisations for regulation is the lack of proper monitoring or corrective action against complaints of deficiencies or non-performance by the logistic service providers.

"For instance, the Tariff Authority for Major Ports had observed that the THC at Mumbai port was unreasonably high, accounting for 30 to 40 per cent of the ocean freight levels.

"There are also occasions when the inland haulage charge, especially in the case of movements by Concor from the hinterland ICDs and CFSs to the gateway ports on the west coast had been equal to or even more than the ocean freight itself," a shipper pointed out.

Indeed, several studies, including one by the World Bank recently, had shown that in India the transaction costs in the field of transportation logistics were very high and not transparent.

It has also been pointed out that in the air-freight sector, no transportation logistics provider can operate at airports unless he is registered and licensed by the IATA.

Shippers campaigning for such a body have pointed out how the FMC in the US had brought about transparency and accountability in port operations

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