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Chennai port increases concession for coastal vessels

TE Raja Simhan Chennai | Updated on July 08, 2020 Published on July 08, 2020

Move to boost coastal shipping, get competitive edge over private ports

In a bid to boost coastal shipping and have an competitive edge over private ports of Kattupalli and Krishnapatnam, the Chennai Port Trust (ChPT) has increased concessions for coastal vessels carrying trans-shipment containers that call at Chennai in bigger ships from Singapore or Colombo and go out of the city in smaller feeder vessels to save cost.

Coastal shipping is cost-effective compared with road and rail. In road transport, the cost is ₹2-3 per tonne/km, in rail it is ₹1.2-1.5 per tonne/km, while in sea transport it is ₹0.2-0.3/tonne/km, said industry sources.

From July 1, the ChPT has modified the concession offered on vessel-related charges (VRC) for coastal vessels carrying coastal trans-shipment and Exim (export and import) laden trans-shipment cargo.

An upfront concession of 70 per cent in VRC will be offered to coastal vessels carrying 100 twenty foot equivalent units (TEUs), or more, of Exim trans-shipment containers per voyage. An upfront concession of 50 per cent in VRC will be offered to coastal vessels carrying either 100 TEUs of coastal laden trans-shipment containers or 100 TEUs of combined EXIM and coastal-laden trans-shipment containers.

Coastal container ships carrying laden trans-shipment containers can claim any one of the above concessions; no other concessions for coastal vessels can be claimed along with this concession, says a trade notice issued by ChPT.

Earlier, a flat 70 per cent concession in VRC was offered to coastal vessels exclusively plying between coastal destinations in India and carrying 100 TEUs or more of Exim trans-shipment containers per voyage. Further, there was a 70 per cent concession on VRC of ChPT Scale of Rates (SoR) for the first 25 voyages per year and a flat 80 per cent concession on VRC of ChPT’s SoR per year from the 26th voyage onwards.

A senior ChPT official said the concession, which will be valid for a year, was in line with the Centre’s plans to boost coastal shipping.

New services

Incidentally, Mumbai-based Shreyas Shipping and Logistics has started two coastal trans-shipment services between Indian ports. The first vessel in the service called at the Chennai port on July 1 and handled 744 TEUs, including trans-shipment containers. One is a weekly service and the other a coastal service with 5-6 calls per month to Chennai, he said.

Ashish Chauhan, Chief Operating Officer, Shreyas Shipping, said ChPT’s new VRC was a big relief to vessel operators. Earlier, the high tariff as per SoR calling was not cost-effective compared with Kattupalli and Krishnapatnam ports. This step of ChPT is going to be a game-changer. With increased number of vessels calling, the Chennai port is going to become a transshipment hub for coastal and Exim cargo.

For coastal volume, Shreyas Shipping is providing tailor-made service, from Kandla (Gujarat) in the West coast to Haldia (West Bengal) in the East coast via Chennai. The company is making Chennai a trans-shipment hub for other services connecting Chennai to East coast ports such as Kolkata, Haldia, Paradip, Visakhapatnam and Kakinada. One of the services will give a direct call to Chittagong (Bangladesh) from Chennai on a fortnightly basis, he added.

There is no congestion and berthing delays at the Chennai port, he said.

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Published on July 08, 2020
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