30% concession for vessel-related charges for foreign feeder ships calling at ICTT

V. Sajeev Kumar Kochi | Updated on March 12, 2018

A view of a longest container vessel berthed at ICTT Vallarpadam.

The Kochi port has decided to offer a 30 per cent concession in vessel-related charges (VRC) to foreign container feeder vessels calling at International Container Transhipment Terminal for a period of six months with effect from October 1.

Though the trade has requested for a one-year concession, the Board of Trustees have given the concession only for six months and further extension will be considered later, depending on the performance of feeder vessels.

However, the Board decided to continue the present concessional rates of VRC to mainline container vessels for one more year till September 30, 2012.

Cost saving

Matching Colombo in VRC for mainline container vessels is of utmost importance as the majority of India's EXIM containers are currently transhipped at Colombo, which if transhipped at ICTT, offers great savings in the total origin-to-destination cost for such containers, sources said.

Need for more feeder vessels

The sources also pointed out that that there is a need to increase the number of feeder vessels at Kochi port so as to succeed it as a transhipment port. While the relaxation of Cabotage provisions has been taken up with the Shipping Ministry, the non-competitive tariff for feeder vessels at Kochi is acting as a deterrent in ensuring adequate feeder services at ICTT.

Clearance delay

According to sources, ICTT has been badly affected due to delayed clearance of transhipment containers landing at the terminal.

The ICTT had handled about 16,000 teus of transhipment containers till August 31, which had an average dwell time of 15 days. This dwell time is not only inordinately high for a transhipment terminal and also higher than the 10.54 days of dwell time in the previous year. So there is a need to increase the frequency of feeder vessels at ICTT for faster clearance of transhipment containers.

High charges

While the VRC at Tuticorin, New Mangalore and Chennai are comparable to one another, the charges at Kochi are more than double the charges at these neighbouring ports, the sources added.

The Cochin Steamer Agents Association was of the view that a vibrant feeder vessel traffic is crucial to cater the national and international transhipment containers to and from Indian and foreign ports.

The terminal operator DP World had also pointed out to the high slot hire charges to Colombo, Jebel Ali, Karachi etc. forced to be levied by the feeder operators at Kochi due to high VRC and the consequent higher freight rates for customers out of Kochi.

Shipping Corporation of India has been repeatedly requesting for considering its SMILE services touching the ports in the West Asia as mainline service or at least to restore the feeder vessel concession for the benefit of their vessels.

Published on October 07, 2011

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