The Hindu Business Line : Bill aims to tighten trade practices in containerised cargo

New act
Draft copy of the Bill being circulated for comments, proposals.
Govt aims at nearly 100 mt of containerised cargo by 2011-2012.
Original Act was for shipping cargo across all categories.

T.E. Raja Simhan

Chennai, Sept. 16 The Department of Shipping will introduce the Shipping Trade Practices (STP) Bill, 2008, to tighten trade practices adopted by service providers in transportation of containerised cargo.

While the original Shipping Trade Practices Act, 2006, was aimed at shipping intermediaries across all cargo handling categories, the present version will be applicable only to containerised cargo.

“The Bill (2008) is to provide for bringing transparency in trade practices adopted by maritime transport logistics service providers in respect of services rendered by them for arranging transportation of containerised cargo; registration of such service providers and their obligations; mode and manner of fixing tariff by the service providers; export-import and for matters connected therewith or incidental thereto,” says the preamble of the Bill, which will go to the Union Cabinet and then to the Parliament for clearance.

“Since container trade will be the future, the Government wants to bring in more transparency in this sector,” said a source.

India’s current share of around 8 per cent in containerised sea cargo is expected to increase to 20 per cent over the next five years. The Government aims at nearly 100 million tonnes of containerised cargo by 2011-12, the source said quoting a research report.

Copy in circulation

The Department of Shipping has circulated a draft copy of the Bill to different stake holders for comments and proposals. “Despite the Bill not being comprehensive enough to cover all links of the supply chain, the introduction of Bill could provide some relief at least from those service providers who are mandated to register with the authorities,” the source said.

The STP 2008 will cover those providing services to carriage or transportation of cargo by sea or in combination with air, road or rail or any other mode; providing warehousing services, including container freight station/inland container depot operations, or providing services relating to stuffing and de-stuffing of containers.

Registration

The Bill also makes mandatory the registration of service providers along with a bank guarantee of not less than Rs 10 lakh. “If any person registered contravenes any provision of the Act, or any rule made there under, or commits a breach of any of conditions of the registration, shall be punishable with a fine, which may extend to Rs 10 lakh,” the Bill says.

Tariff publishing

Every service provider shall, in addition to publishing the tariff, make available the tariff to the public inspection in an automated tariff publication system. The details will include charges, classification, conditions and practices on its own or through any transport group that has been established; date of expiry of the bank guarantee provided by the service provider and the date of expiry of policy of the insurance obtained by him, the Bill says.

In the logistics chain, there are too many links between origin of cargo and destination. At present, there is no monitoring mechanism either for the practices adopted by service providers or a regulatory body to scrutinise the charges imposed by agencies. The charges imposed are never uniform even when the services are rendered by identical service providers. The trade has no option but to accept the charges thrust upon them, the source said.