Transhipment delays pushing biz away from Vallarpadam

V. Sajeev Kumar Kochi | Updated on July 18, 2011

A file picture of a main vessel berthed at ICTT Vallarapadam.

Trade calls for relaxation of cabotage law, better feeder network

Transhipment business through the International Container Transhipment Terminal (ICTT) at Vallarpadam is being hit by the non-availability of sufficient Indian flag tonnage for transhipment. Following the move of some of the mainliners to bypass Kochi, it is feared that the Vallarpadam Terminal could lose substantially in terms of business volume and revenue in the coming days.

Sources in the shipping fraternity told Business Line that mainliners such as Maersk, CMA, PIL, and so on, are planning to shift their vessels to Colombo Port to move transhipment containers to Tuticorin and Mangalore due to lack of timely sailings of Indian flag tonnage from Kochi.

Cabotage law

The shipping circles point out that such a situation has emerged particularly because of the delay in relaxing the cabotage law by the Government.

Due to the existing cabotage restrictions, foreign vessels can not carry transhipment cargoes from Kochi to these ports, they said.

The consortium of feeder operators have brought this matter before the terminal operator, DP World, highlighting the delay being faced by them, especially in moving raw cashew shipment from Kochi.

Citing some cases, they pointed out that PIL's shipment of raw cashew, which landed at the terminal on May 30, could be transhipped only after a rollover and a long gap of 24 days.

Another customer had to wait for 34 days for transhipment when the cargo landed at the ICTT on May 20.

Sources pointed out that the prolonged delay at the transit point of Kochi is not acceptable to the shipping lines and customers as it would affect the quality of cargo, especially raw cashew shipments.

This has led to a situation where the customers now prefer transhipment via Colombo rather than Kochi in view of better connectivity/transit time.

The move is likely to affect volumes moving into Kochi terminal and may hit the throughput, sources said.

The only practical solution to these issues would be to relax, at least temporarily, the cabotage restrictions for transhipment units at Vallarpadam Terminal, which would allow foreign flag vessels also to carry transhipment cargoes until appropriate guidelines are in place from the competent authority.

Vessel-related charges

The shipping fraternity is of the view that a feeder network is essential to the success of ICTT as an international transhipment hub.

Meanwhile, the feeder operators in Kochi have requested the port management to reduce the vessel-related charges for feeder lines, which is now thrice that of the neighbouring ports of Tuticorin and Mangalore.

Seeking a 40 per cent concession in vessel-related charges, the operators said that there is a need to introduce more number of feeder vessels to move transhipment containers to various destinations for which a concession in vessel-related charges is essential.

Published on July 12, 2011

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