The increase in terminal handling charges at Kochi Port has become a matter of concern for seafood industry from the region.
Seafood Exporters Association of India pointed out that the industry is passing through a tough phase and any hike in port related charges will make marine products exports uncompetitive in the global market.
Norbert Karikkassery, President of the Association was of the view that the exorbitant terminal handling charges (THC) levied by the terminal operator at Kochi Port is a major hurdle faced by the marine export industry.
Although the scale of rates for the (THC) is fixed by Tariff Authority for Major Ports (TAMP), he said the shipping services sector pays little heed to the regulatory body knowing full well that no penal action will be taken against them.
The THC in Indian ports today is very high compared to ports in the neighbouring countries including Sri Lanka and the Middle East region. More than half of Colombo Port’s total cargo volume comes from India and this is due to the high charges at Indian ports, he said.
The Association also criticised the unilateral increase of $ 1,500 in freezer container freight rates by all the shipping lines from Indian coasts irrespective of the size of the container and port of destination.
The freight carriers have neither discussed the increase with the shippers nor published their prior intention to hike the rates. The application of an across the board increase of rates for all destinations and sizes of containers clearly indicates that the increase has been applied without proper methodology, he said.
Seafood shippers exporting low value seafood to destinations to East Asia and the Middle East will be put to serious problems due to unilateral increase of rates. He pointed out that many exporters have now started resorting to transhipment through foreign ports to overcome the high freight rates against direct sailing from Indian ports.
The freight rate to UAE for a 40 foot reefer container (18,000 kg) from Kochi is $1700. An increase of $ 1500 (88.32 per cent) will increase the price of the product by Rs 4.60 per kg, which is more the profit that the shipper would make on the product, he said.
SEAI pointed out that the future trade of seafood would receive a serious setback, if the intended freight increase is put into effect.