The Hindu Business Line : Chennai Port asks operators to withdraw congestion surcharge

Chennai, Jan. 5 The Chennai Port Trust warned feeder operators that if the congestion/trade surcharge at Chennai was not withdrawn, it would not give priority to the berthing of the operators’ ships. The operators had imposed a surcharge of $100 per twenty-foot equivalent unit (TEU) from December 7 due to “inordinate delay in vessel turnaround and under-utilisation of vessels leading to increase in port stays.”

Ultimatum

The operators were given an ultimatum till January 7 (Monday) morning to withdraw the surcharge. If not, the port trust said that priority would be given only to those vessels that did not impose the surcharge. According to sources, the ultimatum was given at a joint meeting with representatives of the Port Trust, the vessel operators, Chennai Container Terminal and various chambers of commerce.

Loss

A representative of the container feeder line said that the operators had lost around $2 million due to the congestions and reduced productivity at the terminal. The surcharge was imposed to recover such loss.

An official representing the Southern India Chamber of Commerce and Industry said: “The loss of $2 million would have been recovered in one week by vessel operators (3,000 TEUs/day x $100/TEUx7 days = $2.1 million).” The operators have not only recovered the loss, but also garnered additional profits by continuing the surcharge for more than four weeks. “The surcharge should be removed immediately.”

Freight burden

Exporters are burdened due to increased freight costs. In the past, a surcharge was applied during times of strike, and stoppage. Feeder operators have benefited due to the improved efficiency of the terminal operator, but such benefits have not been passed on to the trade, the official said.

Surcharge

The operators planned to increase the surcharge to $175 from December 21, but this was not taken up due to improvement in terminal productivity. The surcharge was only a partial recovery, as costs could not be borne purely by the vessel operators themselves, the operators said in a statement.