The Hindu Business Line : Concor tariff on tea irks Irugur ICD users

Coimbatore, Oct. 16 Container Corporation of India (Concor), managing the inland container terminal at Irugur, Coimbatore, has slapped a special tariff of Rs 2,000 for local transport of house-stuffed tea consignments much to the chagrin of the tea exporters and inland container depot (ICD) users.

The custom house agents and the ICD user-agencies say Concor’s move on new tariff, amounting to withdrawing the free local haulage accorded for the past so many years for tea as a special commodity, would cause flight of export cargo to gateway ports, affecting Concor ICD’s throughput further.

The Irugur ICD custodian has in its communication to the ICD users indicated that the special tariff, effective October 7, will be applicable for transportation only up to a radius of 35 km from the Irugur ICD.

Concor’s new levy has, however, met with opposition from the members of the custom house agents and steamer-line representatives handling export of tea containers. They have charged that the new levy would render tea shipments via ICD in Irugur costlier.

Opposition

Reacting to Concor’s decision to collect the local transportation tariff, the Coimbatore Steamer Agents and Custom House Agents Association has said that ‘free’ local haulage of house stuffed tea containers remained in vogue with a view to encouraging more container operation through the ICD as opposed to taking the cargo directly to gateway ports.

Round-trip operation

Mr P. Subramaniam, Manager with the Peirce Leslie India Ltd, Coimbatore, and one of the leading logistics companies in tea shipments in the region, said the free local transportation was allowed because the custom house agents could establish time and again the fact that round-trip container operations from Kochi to Coimbatore tea factory proved cheaper than the factory-to-ICD Irugur-Gateway port route operations.

Currently, a tea exporter who opts for round-trip cargo despatch — bringing the empty container from Kochi, stuffing tea at the factory premises in Coimbatore and moving it back to Kochi port — would in all incur Rs 14,242 for a 40-feet container load.

A shipper operating through the ICD at Irugur would incur for the same load factor, Rs 16,370 without taking into account the ICD’s additional Rs 2,000 special tariff for tea. If this is added, then the total cost difference for the shipper operating through Concor ICD will work out more than Rs 4,000, said Mr Subramaniam. This calls for, according to him, ICD to retain the ‘free haulage’ for local tea consignment transport as it has no justification to levy the special tariff in the absence of any hike in recent times in fuel cost.

Concor view

Concor, however, in its communication to the trade, had said that it had chosen to absolve the tariff for local transportation of stuffed tea containers for almost 15 years now in the hope that it would help improve tea traffic volume at its ICD. Butwith the traffic showing a downward trend, the corporation was forced to levy a ‘nominal tariff’ on local transport of tea consignments to curtail its losses.

Concor further said that after shifting its ICD to Irugur, the distance for local transport had increased to 32 km one way and after completing stuffing work at the factory, the tea consignment had to come back to ICD for seal verification, which raised the cost for the corporation and necessitating the introduction of the tariff, Concor has said.

‘Not buying argument’

But Mr Subramaniam would not buy Concor’s argument on falling tea volumes saying that when tea shippers faced shortage of trailers, they tended to divert shipment direct to ports to execute export orders.

Unlike other commodities, tea being high-volume-low-margin, is often exported by the shippers at losses. Realising this, shipping lines are often persuaded by tea exporters to reduce their freight rates in return for assured cargo business from them.

The Concor ICD in Coimbatore too, if it cared to increase its tea cargo volume, should come forward to share the burden with its transport operator so as to retain the cargo which, otherwise, would move to either other ICDs or the gateway ports.

More Stories on : Supply Chain Management | Tea | Tamil Nadu

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