Logistics

Cochin Port Users Forum oppose move to levy Direct Port Delivery charges in container terminal

V Sajeev Kumar Kochi | Updated on September 29, 2021

Additional building to hit importers and adversely affect trade

The shipping fraternity in Cochin Port Trust are up in arms over the move to implement Direct Port Delivery (DPD) and En-Bloc movement charges by the terminal operator India Gateway Terminal with effect from October 1.

The shipping trade under the banner of Cochin Port Users Forum has come out against the notice put out by IGTPL, owned by DP World, to charge ₹800 for 20 ft containers and ₹1,200 for 40 ft boxes. The rates would be repeated after five days, if the containers are not cleared from the terminal.

While these charges are already inbuilt in the terminal handling charges billed through shipping lines, Cochin Port Users Forum said that the additional billing for DPD charges would ultimately hit importers and detrimentally affects the interest of trade routed through ICTT, Vallarpadam.

Increasing operational costs

The notice also insisted that all the importers register themselves with IGTPL on or before September 30 with a caution deposit of ₹50,000 per importer and the billed amount gets automatically debited from the respective deposits.

Considering an average of 600 importers – both regular and small scale-- the total binding amount would reach ₹3 crore, thereby making Kochi an expensive port in South India, Prakash Iyer, Chairman, Cochin Port Users Forum, told BusinessLine.

Currently, the terminal handling charges at IGTPL are almost double that of Tuticorin, or Chennai, besides the higher operational costs. The add on charges for Direct Port Delivery and En-Bloc movement to CFS will further enhance the cost of operations, he said.

The major import containers routed through ICTT are newsprint, crockeries, raw cashews, raw spices, cement and plywood. This alone would come to approx. 3,000 containers per month, while other cargo consists of glass items and other industrial products for value additions and re-exports.

The shipping fraternity said that ICTT, with the capacity to handle 10 lakh TEUs has achieved only 60 per cent and thus, storing containers for customers’ choice of movement would not affect any terminal operations. Even after the commissioning of ICTT in 2011, there is no improvement of direct vessels services from Cochin port to other trade routes other than one service to Europe and one to Far East.

The additional cost for movement of import containers would also go against the Prime Minister’s National Mission to meet $400 billion by 2022. Recently, the government has proposed to promote DPD facilities to all importers to curtail additional handling costs for import cargo to reduce logistical cost. Hence, the unilateral decision by terminal authorities is contrary to the government’s stand, they said.

Importers and trade associations have raised concern and sought the intervention of the Shipping Ministry, Cochin Port Trust and Cochin Customs to resolve the crisis.

Published on September 29, 2021

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