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T.E. Raja Simhan

Chennai, June 20 Hyundai will need to work on a tight schedule to export its cars from Chennai port with the number of free days for allowing cars handled by Roll-on Roll-off (RoRo) car carriers reduced to 10 days from 30.

“We want to improve utilisation of the storage yard as many new exporters have started using our port,” the Chennai Port Trust (ChPT) said in its proposal to the Tariff Authority for Major Ports (TAMP), which approved the reduction in free days.

The port handled 1.14 lakh Hyundai cars in 2006-07 and around 1.30 lakh last fiscal.

There may be financial implication due to the proposed reduction in the existing free days. But, the ChPT may be in a position to utilise the yard more effectively, the TAMP orders says.

If cars are exported within ten days, the vacant storage space will be allotted to other exporters like Mahindra, Nissan, Renault, Daimler, Volvo and Caterpillar – all have evinced interest in using the Port for exports. However, the additional income that can be earned by utilising the storage space cannot be assessed now.

The ChPT in an analysis of dwell time of motor cars in 2006-07 showed that the average period of stay of export motor car was around 10 days. Further, a special agreement was signed on January 17, 2007 between ChPT and Hyundai on mutual association between the parties for a period of 12 years.

The agreement says that ChPT will permit Hyundai to bring motor cars in the allotted area only 10 days prior to the shipment. “Having agreed to this condition and signed the agreement, the objection raised by Hyundai does not appear to be justified. Seen in the light of the analysis furnished by the ChPT and the relevant provision of the agreement it had signed with the major user organisation, the proposal of ChPT does not appear to be unreasonable,” the TAMP noted.

When car exports through Chennai commenced in December 1999, 30 days free period was allowed for aggregation of cars for shipment. Since storage yard capacity is limited and volumes have since increased, the port needs to seek better turnaround of storage yard area.

Hyundai claims that the Chennai city has traffic restrictions. Further, its volumes have increased to 21,000 passenger car units (PCUs) a month from 10,000. It sought more time to aggregate shipment. Car carrier operation is different from cargo operations.

“Even if it is essential to reduce the free period for the sake of improving operational efficiency, the reduction should be gradual. We suggest, that free period may be reduced to 21 days in the first instance,” Hyundai told TAMP.

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