The Hindu Business Line : Terminal Handling Charges in Kolkata port — Shippers, shipping lines on collision course

Shipping lines and shippers are at daggers drawn over the Terminal Handling Charges of the Kolkata Dock System. The former insist that ports the world over levy THC but the shippers complain that these charges have been used by the shipping lines and their agents to fleece the trade.

THERE are a few issues on which shippers and shipping lines see eye-to-eye, but on some they are always daggers drawn.

The Terminal Handling Charge (THC) is one such issue. The shipping lines insist that ports world over levy THC but the shippers complain that these charges have been used by the former and their agents to fleece the trade.

The dispute between the Eastern India Shippers Association (EISA) and the Association of Shipping Interests in Calcutta (ASIC), the body of shipping lines and the agents of foreign lines operating out of Kolkata, over the THC in the Kolkata Dock System, it seems, will never end.

The root of the trouble is the Kolkata Port Trust's circular issued on March 28 subsequent to the installation of mobile harbour cranes at two of its berths, Nos. 5 and 8 of the Netaji Subhas Dock.

Since mobile harbour cranes are well suited for ship-to-shore work, the port authorities themselves, the circular said, would provide integrated stevedoring services (inclusive of onboard stevedoring) at the two berths and collect directly from importers/exporters or their authorised C&F (clearing and forwarding) agents at Rs 750 per TEU for onshore operation and Rs 795 per TEU for onboard handling charges (payable to the Calcutta Dock Labour Board). The message was clear: The shipping lines must reduce the THC by the amount equivalent to "onboard stevedoring" charges.

However, that did not happen. Though the new rates, according to the KoPT circular, were to come into force from April 1, the actual implementation was from April 15.

According to the EISA, between April 1 and 14, many shipping lines and their agent continued to recover from shippers onboard stevedoring charges as part of the THC when there was no reason for doing so. Because during the period, the port authorities charged directly from the shippers for using mobile harbour cranes at berth Nos 5 and 8, as per the revised rules.

A clear case of double-charging, complained the EISA and demanded refund of the extra money charged by the shipping lines and their agents.

The EISA did not stop at merely protesting at this "irregularity". It sought the immediate intervention of the Shipping Secretary, Mr D. T. Joseph. The Ministry wrote to the ASIC president seeking clarification. ASIC members felt the EISA had overreacted, not bothering to understand the real issues involved and the genuine problems facing the shipping lines, particularly foreign lines and their agents.

Soon after the port authorities issued a notification on the revised rates, the ASIC office-bearers met the top officials of the Kolkata Port Trust (KoPT) and sought a month's time for implementing the new rates.

As they explained, the principals of many foreign shipping lines would take time to analyse the implication of the new rates and react. The port officials gave them 15 days but no circular was issued that the revised rates would be effective from April 15.

The shipping lines, particularly the foreign principals, it was pointed out, were confused over the multiple THCs — for CPY (container park yard), for non-CPY and now for mobile harbour cranes — at the Kolkata Port.

In most other ports, there are two THCs — for imports and exports. The foreign principals would, therefore, take time to understand all this, especially as they had to modify their computer-based systems.

Besides, it was pointed out, many ASIC members were themselves not clear about the complexities of the new arrangement. It was, therefore, decided that all the issues would be discussed threadbare to arrive at a consensus to offer the best possible deals to the shippers. This exercise would take time.

In its reply to the Shipping Ministry, the ASIC pointed out how the shipping lines operating at Kolkata have always tried to protect the interests of the trade to help them maintain their competitiveness in the world market.

The ASIC has also referred to another aspect. In most parts of the world, at least one month is given before the enforcement of revised rates.

This has been followed by the ASIC members all along. When there is an upward revision, the shippers also welcome the one-month notice.

However, when it comes to downward revision, the shippers insist on immediate implementation. Is that fair, wonder many ASIC members.

Finally, the ASIC has drawn attention to its non-representation on the Board of Trustees of the KoPT.

For quarter of century, there was always an ASIC representative on the KoPT. Not any more.

Three years ago, when the Board was reconstituted, the ASIC representative was dropped.

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