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Come May, terminal handling charges at the International Container Transshipment Terminal (ICTT), Vallarpadam, are set to increase. The terminal operator, DP World, has effected a 7.27 per cent hike for some services, citing a Tariff Authority for Major Ports (TAMP) order dated March 27.
Voicing concern over the hike, members of the Exim trade sector say the timing is most inappropriate as the Centre is attempting to reduce logistics costs from 16 to 9 per cent to make Indian trade more competitive.
However, DP World has clarified that certain handling tariffs will remain unchanged and some, including transshipment handling charges, will be decreased by 7.27 per cent.
‘Empty’ worry
Some handling charges remain unchanged from the previous year, agreed Prakash Iyer, president of Cochin Port Users Forum. But others have risen by 7.27 per cent, including handling cost of empty boxes; reefer plugging for reefer cargo; port storage handling of all export-import cargo, as well as for coastal cargo including dry and reefers.
The rise in handling charges for empties would adversely hit exporters with a corresponding increase in ocean freight. Imports are almost 50 per cent less than exports out of Kochi and containers must be repositioned to meet export requirements. The rate increase would pave way for cargo to move out of Kochi to Tuticorin Port, which is almost 60 per cent cheaper, Iyer said.
Binu KS, president, Kerala Steamer Agents Association, said that while the proposed revision would spare the export/import tariff of dry units., it would impact the terminal handling cost of empty units and reefers, which are crucial to the industry. Kochi depends, by and large, on equipment repositioning from other ports. Refrigerated containers and 40 feet high cube containers are being repositioned from elsewhere to carry export cargo from Kochi. Hence the proposed hike in the handling charge of empty units will impact the trade, which is already experiencing reduced volumes, he said.
‘Expensive port’ tag
Alex Ninan, president of Seafood Exporters Association of India-Kerala region, said Kochi is already known as the most expensive port in India and the proposed rate hike would worsen the perception. The global slowdown has hit marine product exports and any rate increase would affect the competitiveness of Indian products. The high rates in Kochi have already forced cashew exporters in Kollam to shift to Tuticorin Port, he added.
“We are approaching DP World with a request to maintain the existing tariff, which will help the ailing trade community,” Binu said.
Suraj Muraleedharan, president of Cochin Customs Brokers Association, said that besides the rate hike the trailer crew’s demand for higher allowance would impact traffic movement from Kochi.
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