Imports through Kochi Port may be costlier from September following the Tariff Authority for Major Ports (TAMP) order to reduce the dwell time for import cargo.
The shipping community here has received a notification from TAMP to reduce the current free period from seven days to five days from September 1 and later to three days with effect from December 1.Demurrage charges
The reduction in free time, according to the community, will force the Exim trade to pay demurrages if the cargo is not evacuated from the terminal within the stipulated time.
The notification will bring difficulties in clearing import containers besides financial burden in the form of additional costs, said Prakash Iyer, former president of the Cochin Steamer Agents Association. The move will increase the storage cost to importers as they will have to pay an additional amount in the range of ₹1,600 for 20 ft containers and ₹3,200 for 40 ft, he said.
TAMP’s decision to reduce the dwell time for import containers is aimed at easing congestion experienced at many of the major ports.Situation in Kochi
However, the port users in Kochi were of the view it would not be viable to implement it in VaIlarpadam terminal given its underperformance and sufficient unutilised space availability.
They argue that the 7-day free time for port storage charges should instead be used as a marketing tool to attract more cargo, as the terminal is yet to reach the one million TEU capacity.
“The move makes sense in congested ports, but in Kochi, where the terminal is operating at one-third of its capacity, it defies logic”, Iyer added.Official stance
However, Kochi Port officials maintained that the reduction in dwell time would reduce the time of physical receipt of imported goods by the consignee.
Moreover, Kochi Customs has to achieve the 72-hour target for dwell time import cargo set by Central Board of Excise and Customs for all Customs formations in the country. The average dwell time in Kochi is now 15.36 days which is much longer than the dwell time in other Indian ports on account of the long free period offered at Vallarpadam terminal.
The Customs officials also felt that the 7-day free time would lead to a tendency to delay the movement of import containers to container freight stations and for filing of Bill of Entry.