The Hindu Business Line : Chennai feeder operators may hike congestion surcharge

Charging more
The group levied $100 surcharge from December 7.
The reasons for the hike include poor terminal productivity, under-utilising vessels.

T.E. Raja Simhan

Chennai, Dec. 18 The Chennai Feeder Operator (CFO) group, operating container ships in and out of the Chennai, may increase the congestion surcharge to over $150 a TEU (twenty foot equivalent unit), $50 higher than the current surcharge.

The group levied $100 surcharge from December 7 following ‘difficult and unacceptable trading circumstances.’ This includes ongoing imbalanced trade; poor terminal productivity; restricted move counts; limited Form 13s (that mention details of products to be shipped) and under-utilising vessels. This resulted in longer port stay for ships and insufficient allocation of cranes, the group said.

“With no immediate sign of improvement in the situation, there is a possibility of an increase in the surcharge,” said an official of a shipping line and part of the CFO group.

In the last couple of months, the average turnaround time — the time a ship arrives and leaves Chennai — for container ships increased to about a week compared to the normal 48 hours. The cost impact to operators was in excess of ‘million dollars.’ This cost is passed on in part to local industry through the export-import container movements via a surcharge.

For a 2,000-TEU capacity vessel, owners need to spend $10,000 a day on charter and fuel charges, he said.

Since the middle of November, there had been a capacity constraint at the terminal due to launch of new container services. There was a drop in productivity to around 15 moves an hour compared to a peak performance of over 20 moves due to ‘go slow’ by the terminal’s employees, and a subsequent trucker strike.

For a terminal, which inherited the same number of berths (four) and limited yard space six years ago, it is a wonder that it has grown to a million TEU a year. With the volume growing at around 20 per cent at the terminal, immediate action is required to avoid further deterioration of the current situation.

Apart from the bad weather and ranging (high waves in port stopping vessel operations), poor road access, truckers’ strike and yard congestion, it appears that the ‘blame game’ between the terminal and its users continues without respite, the source said.

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