The Hindu Business Line : The Amingaon tea party begins

Every year, around this time, Container Corporation of India (Concor) holds a meeting in Guwahati to work out the programme for the year's tea exports to be routed through the Amingaon Inland Container Depot (ICD). At the meeting held recently and attended, among others, by a cross-section of tea shippers, shipping lines and senior railway officials, the 2006-07 performance was reviewed and the programme for 2007-08 discussed and tentatively prepared.

Tentatively, because the picture will be clear as and when tea shipments begin. Inquiries suggest that the shipping lines will start placing the empties at the ICD from around the middle of next month so that the first shipment can move out towards the end of the month.

The recent Guwahati meeting revealed many interesting facts. The throughput of tea exports through the ICD in 2006-07 was 2597 TEUs, compared to 2299 in 2005-06, a growth of about 13 per cent. This is the second highest throughput achieved by the ICD, the highest so far being 2753 TEUs in 1997-98.

The Winner

Next, for the first time, the Shipping Corporation of India failed to secure the winner slot. In 2006-07, K-line was the winner for having posted the highest throughput — 38 per cent, at 995 TEUs, compared to SCI's 31 per cent, at 803. Ever since the ICD was commissioned in 1986, SCI has been the consistent winner.

One reason for this year's debacle is that SCI's share dropped on the Tetley account — from 209 TEUs in 2005-06 to 101 in 2006-07 whereas K-Line's share increased to 526 TEUs (236). Also, SCI's share in the UK/Continent trade dropped to 39 per cent (496 TEUs) in 2006-07 as compared to 74 per cent (808 TEUs) in 2005-06.

The corresponding figures for K-Line were 54 per cent, at 684 TEUs, compared to 22 per cent, at 238 units. Last year, SCI's share in shipments to non-UK/Continent ports was 11 per cent, at 129 TEUs; the corresponding figures for 2006-07 increased to 23 per cent at 307. However, in 2006-07, the share of non-UK ports, at 1330 TEUs, represented 51 per cent of the total, compared to 1202, representing 52 per cent in 2005-06.

The ICD handled 83 TEUs of import cargo in 2006-07, against 81 the previous financial. Only 24 of the import containers could be used for exports. Therefore, the meeting felt that the possibilities of fumigating and utilising them in the ICD should be explored.

In 2006-07, the ICD handled 36 rakes with an average payload of 72 TEUs, against 32 rakes with the same average payload in 2005-06. The average running time to Kolkata port dropped to 68 hours (72 hours). More than 92 per cent of the containers handled at the ICD were 40-ft containers (FEUs) and a little more than seven per cent 20-ft boxes.

Among the shippers, McLeod Russel topped the list with a throughput of 1039 TEUs (321), followed by Hindustan Lever 1010 (808), Tata Tea 372 (382) and Assam Company 124 (92). Among the shipping lines, K-Line was at the top, with 995 TEUs (304), followed by SCI 808 (941) APL 502 (887 ), Pacific International 166 TEUs (nil) and Maersk 92 (nil) and others 34 TEUs (85 TEUs).

Targets set

The target for 2007-08 has been fixed at 3,000 TEUs, though there have been apprehensions about the intense competition from Kenya, which has reported a better crop this year than the previous year, and Sri Lanka not doing too badly. Pakistan is a major buyer of Kenyan tea.

In 2006-07, Amingaon handled 197 TEUs for Pakistan, compared to just eight in 2005-06. Pakistan imported more from India due to the crop failure in Kenya. Another area of concern is the strengthening of the rupee which, if it persists, will render the domestic sale more attractive vis-à-vis exports.

For 2007-08, Concor has no proposals for freight hike; more important, it has decided to spend an estimated Rs 3 crore during the year to augment facilities in the ICD. The present railway lines will be extended to handle two full rakes at a time, one for domestic traffic and the other for exports.

There is also a proposal to introduce all air-brake rakes to improve the turnaround time. Three rakes are now operated on the circuit. Concor is mulling taking up with the Railways the issue of securing some discount on movement of empties. There is a proposal to handle domestic tea at the ICD along with tea exports.

Inquiries reveal that the shipping lines that move shipments through the Amingaon ICD in 2007-08 may announce a freight hike — about $150 per TEU/$300 per FEU. SCI may have to take an aggressive as well as flexible approach to retrieve the lost ground.

While its introduction of services to Dammam and Jebel Ali has yielded results after some initial hiccups, a section of tea shippers sincerely feel that the national carrier should also cover Bandar Abbas, the Iranian port.

More Stories on : Shipping | Tea | On the move | Exports & Imports | Tata Tea Ltd

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